US foreign-trade zones seek legislative changes to address USMCA tariff disparities

U.S. manufacturers operating within foreign-trade zones (FTZs) are facing increasing competitive pressure as shifting tariff policies create additional costs for companies exporting goods to Mexico and Canada.

The National Association of Foreign-Trade Zones (NAFTZ) is calling on Congress to address what it considers a longstanding disadvantage affecting American manufacturers under the United States-Mexico-Canada Agreement (USMCA). Its president, Jeff Tafel, argues that existing customs rules can leave U.S. companies paying duties that competitors operating in Mexico and Canada are able to avoid.

The issue is becoming increasingly important as North American businesses reconsider their sourcing strategies, manufacturing investments and distribution networks amid tariff uncertainty and the ongoing review of USMCA.

“One of the most significant competitive disadvantages facing U.S. FTZ manufacturers involve the treatment of goods exported to Canada and Mexico under USMCA,” Tafel told FreightWaves.

Under current arrangements, manufacturers operating in American foreign-trade zones may have to pay duties on imported components used to manufacture finished products that are subsequently exported to Mexico or Canada. This can happen even when the finished goods qualify for preferential treatment under USMCA.

By comparison, manufacturers in Mexico and Canada can benefit from duty-relief programs that eliminate similar costs, according to Tafel.

He warned that the situation creates an uneven competitive environment in which American manufacturers face additional expenses simply because they have chosen to produce their goods in the United States.

NAFTZ backs 2 bills to reduce extra customs costs

To fill the gap, NAFTZ is supporting two legislative proposals that would give more flexibility to duties imposed on qualifying merchandise made or modified in U.S. foreign-trade zones before being exported to Mexico or Canada.

The proposals are

  • H.R. 6792: Foreign-Trade Zone Export Enhancement Act of 2025 Introduced by Rep. Lance Gooden.

  • The Foreign-Trade Zone Export Enhancement Act of 2026 (S. 4793), introduced by Sen. Tim Scott,

The two companion bills would remove the additional duty burden on eligible U.S. exports to neighboring USMCA markets.

Tafel says Congress should act now, not wait for the trade agreement review to be completed to find a solution.

He called the legislation a focused effort that could increase domestic production and improve the ability of American exports to compete globally.

Foreign-trade zones (FTZs) are special areas supervised by U.S. Customs and Border Protection (CBP). They allow businesses to store, assemble, manufacture and distribute merchandise under certain customs procedures.

A major benefit they enjoy is the deferral of duties on imported goods until the goods actually enter the U.S. domestic market. Some goods that are exported directly from these zones may also qualify for duty exemptions.

Recent tariff measures, however, have imposed new restrictions. Some imported goods now have to enter FTZs under a status called "privileged foreign" which could restrict traditional customs benefits, Tafel said.

Even with these changes, companies still benefit from foreign-trade zones through duty deferral, simplified customs procedures and more efficient inventory management.

Texas leads the nation in foreign-trade zone activity

The latest federal numbers highlight the economic importance of the FTZ program nationally, particularly in Texas.

Merchandise received by FTZ operations nationwide totaled $963.8 billion in 2024 compared with $948.8 billion in 2023, according to the U.S. Foreign-Trade Zones Board's 2024 Annual Report to Congress, released in November 2025.

Exports from those operations fell to $133.5 billion from $148.8 billion a year earlier.

Nationwide, the program supported nearly 543,000 jobs through approximately 1,300 active operations, of which 381 were production operations.

In 2024, Texas led the nation in merchandise received and exports generated by foreign-trade zones.

Its network includes several major international trade gateways, most notably Houston, Laredo, El Paso, McAllen and Brownsville.

The federal report also listed several Texas areas among the nation’s leading warehouse and distribution sites for exports:

  • El Paso FTZs 68 and 150 were ranked third and fourth in the nation, respectively.

  • McAllen's FTZ No. 12 was seventh.

  • Brownsville's FTZ No. 62 was eighth.

  • Laredo's FTZ No. 94 was 14th.

These rankings underscore the importance of FTZ infrastructure to Texas’ cross-border logistics and distribution operations.

Production operations accounted for about 61% of all merchandise received by foreign-trade zones at the national level in 2024. Some of the main industries that used the program were automotive manufacturing, oil refining, machinery and pharmaceuticals.

Cross-border investment decisions are being affected by tariff uncertainty

The effects of shifting trade policies are most visible along the U.S.-Mexico border, where manufacturers, logistics providers and distribution companies rely on tightly linked supply chains.

"Foreign-trade zone operators are increasingly hearing from companies re-evaluating their sourcing arrangements, freight volumes, warehouse requirements and transportation networks," says Tafel.

Some companies are also considering moving some manufacturing or distribution activities from one side of the border to the other.

Uncertainty over the future of tariff policies is making it difficult for companies to plan for the long term, Tafel said.

These discussions do not mean that companies have already decided to move their operations. But uncertainty is increasingly becoming an important consideration for companies when they look at major capital investments.

The decision to establish a new manufacturing facility or distribution center—or to relocate an existing operation—is a significant financial undertaking. Once such decisions are made, it is hard to reverse them even if trade policies change later.

But the bigger challenge for Tafel is not just relocating existing facilities. Uncertainty about the current trade environment may also affect where companies decide to make their next big investments.

He warned that such decisions could have longer-term consequences for U.S. manufacturing, investment and employment well beyond the current trade cycle.

U.S. foreign-trade zones: Key figures for 2023 and 2024

The following figures are drawn from Appendix A, page 11, of the Foreign-Trade Zones Board's 2024 Annual Report to Congress.

Metric

2023

2024

YoY change

Merchandise received

$948.8B

$963.8B

+1.6%

Exports

$148.8B

$133.5B

-10.3%

Production merchandise received

$584.9B

$589.8B

+0.8%

Warehouse/distribution merchandise received

$363.9B

$374.0B

+2.8%

Active FTZs

200

199

-0.5%

Source: Foreign-Trade Zones Board's 2024 Annual Report to Congress, Appendix A, page 11.

Mexico prepares to reinforce highway security with 826 additional National Guard officers

Mexico is preparing to strengthen security across its highways by deploying 826 additional National Guard officers, following nationwide protests from trucking organizations over cargo theft, violence and extortion.

The reinforcement was announced during a November 5 meeting between federal authorities and representatives of the trucking industry, according to Mexican transportation publication T21.

Lauro Rincón Hernández, president of the Mexican-American Federation of Transporters (FEMATRAC), confirmed that the officers are completing their training at the San Luis Potosí Police Academy.

They are expected to begin their assignments in the coming days, although authorities have not yet provided a specific deployment date.

The announcement follows a nationwide trucking strike held on October 26, during which transport organizations called for stronger government action against cargo theft, deteriorating highway security and alleged abuses by authorities.

During discussions with government representatives, industry groups identified nine states where highway security remains a particularly serious concern:

  • State of Mexico

  • Puebla

  • Nuevo León

  • Jalisco

  • Veracruz

  • Querétaro

  • Guanajuato

  • Tlaxcala

  • Tabasco

TTransport associations have also called for National Guard patrols on a permanent basis and changes in security strategies in areas with high levels of criminal activity.

The continuation of Operation Enjambre (Operation Swarm), a security operation targeting municipalities and states with increased criminal activity, was also discussed.

Extra meetings will likely involve security officials and federal prosecutors.

“Trucking organizations want to see some real, measurable improvements in protection on the highways before the year is out, particularly in areas where cargo theft and attacks on transport operators continue to threaten freight movements.

Ametek to Invest $25 Million in Mexico Border Expansion, Create 650 New Jobs

U.S.-based Ametek Inc (NYSE: AME) is spending $25 million to grow operations at its two Mexican border cities. The project is expected to create 650 new jobs in Reynosa and Nuevo Laredo.

The Tamaulipas Ministry of Economy announced the expansion on November 5.

The investment will be spread across the following locations, the announcement says:

- 400 new jobs created in Reynosa
- Newest Laredo: 250 new jobs

Reynosa is across from McAllen, Texas, and Nuevo Laredo is across from Laredo, Texas. Both cities are important industrial and logistics centers for trade between Mexico and the United States.

Ametek currently has about 2,600 employees at its Reynosa operations.

The company hasn't yet released a construction schedule or said when the new jobs will be filled.

Ametek, headquartered in Berwyn, Pennsylvania, focuses on precision components and technology solutions for a broad range of industrial markets including medical devices, aerospace and semiconductors.

The company employs 22,894 people worldwide in a network of 150 locations, encompassing over 100 manufacturing plants and more than 100 sales and service centers.

This new investment is another step to reinforce the company’s presence in Tamaulipas, where cross-border manufacturing is a fundamental activity for the industrial development of the region.

Why this matters

These developments underscore the differing pressures and opportunities shaping North American cross-border trade.

Unequal customs treatment under the USMCA could influence where manufacturers choose to build production facilities, source components, and channel their exports. Also, security issues on highways continue to be a major hurdle for trucking companies carrying freight between Mexico and the U.S.

In this regard, Ametek’s $25 million expansion highlights the continuing allure of Mexican border manufacturing centers as drivers of investment and job creation, even as companies grapple with an increasingly uncertain trade environment.