FOREIGN TRADE ZONE (FTZ)

This is one of the most immediate and significant benefits. Customs duties on foreign merchandise are not paid until the goods are transferred from the FTZ into U.S. Customs territory for consumption. This allows companies to improve cash flow by retaining funds that would otherwise be tied up in duty payments on inventory. For manufacturers with high-value imports or long inventory cycles, the working capital benefits can be substantial. 

 This is a powerful advantage for manufacturing operations. If imported components are subject to higher duty rates than the finished product manufactured from them within the FTZ, the company can elect to pay the duty rate applicable to the finished product when it enters U.S. commerce. 

 This "inverted tariff" provision can lead to significant duty savings, particularly for complex assembly or manufacturing processes. Labor, overhead, and profit attributed to FTZ production are also excluded from the dutiable value. 

No U.S. Customs duties are paid on foreign merchandise that is imported into an FTZ and subsequently re-exported to another country. This is highly beneficial for Wisconsin companies serving global markets.

Duties are eliminated on merchandise that is scrapped, wasted, destroyed, or consumed within the FTZ. If these  goods were to enter U.S. Customs territory directly, duties would typically be assessed on their full value.

Merchandise that becomes obsolete while in an FTZ can be destroyed or re-exported without duty payment, avoiding costs on unsalable goods.