Key Benefits:

• Inverted Tariff – Manufacturers can realize the lower duty rate between imported raw materials or finished product
• Duty Deferral on re-exported products
• Weekly Entry reduces brokerage fees and merchandise processing fees (MPFs)
• Elimination of Duty/Drawback for re-exported product and scrap for savings and cash flow benefits

Example:

Sony utilizes an FTZ to level the international playing field:

“Employees at the Sony Electronics plant near Pittsburgh, Pa., use a production line that integrates the flexibility of manual labor with the cost reduction and quality improvement available through automation. The plant’s supply chain is also a hybrid; it uses its FTZ status to combine imported and domestic resources at a duty rate otherwise only available to manufacturing plants in other countries. The East Coast location means the plant can ground ship completed goods to 60 percent of their customers within 24 hours. Feedback from the local market can be more easily understood and more quickly assimilated back into the product by the local engineering staff. Quality problems with outsourced components are found at the plant, not in customers’ homes. These advantages are not easily replicated in a distant location.”

Read more here: “Foreign Trade Zones: Fostering US Competitiveness in a Global Economy“