Foreign-Trade Zone Export Enhancement Act of 2025
- Sponsor
- Rep. Gooden, Lance [R-TX-5]
- Committees
- Ways and Means Committee (primary)
- Last action
- Dec 17, 2025
Bottom line
The bill ensures that goods manufactured or changed in condition within U.S. foreign-trade zones and then exported to USMCA partner countries are explicitly free of U.S. duties, aiming to boost U.S. competitiveness and jobs.
What it actually does
This bill clarifies the tariff treatment for merchandise processed within U.S. foreign-trade zones (FTZs) and subsequently exported directly to Canada or Mexico under the United States-Mexico-Canada Agreement (USMCA). It amends the Foreign Trade Zones Act to ensure such goods are duty-free and creates a new Harmonized Tariff Schedule (HTS) subheading (9801.00.95) to explicitly grant this duty-free status. The aim is to enhance the competitiveness of U.S. manufacturing and distribution within FTZs.
Proponents argue
Proponents argue that this bill removes an unintended tariff burden, thereby enhancing the competitiveness of U.S. manufacturing and distribution operations within foreign-trade zones. They contend it will support job creation and preservation in the United States by making FTZs more attractive for export-oriented businesses, aligning U.S. law with the spirit of the USMCA agreement to facilitate duty-free trade.
Opponents contend
Opponents might argue that while seemingly a clarification, this bill could lead to a minor reduction in potential tariff revenue for the U.S. government, even if the goods were largely expected to be duty-free under USMCA. Some might also contend that it provides a specific advantage to companies operating within FTZs, potentially creating an uneven playing field compared to businesses outside these zones.
The bill is very short and clearly written, making it highly accessible for a reader to evaluate within a short timeframe.
Section 3(a)
Amendment to Foreign Trade Zones Act
This provision amends Section 3 of the Foreign Trade Zones Act (19 U.S.C. 81c) by adding a new subsection (f). This new subsection clarifies that certain articles, specifically those subject to USMCA duty deferral restrictions and classifiable under the new HTS heading 9801.00.95, will enter duty-free. This applies to goods manufactured or changed in condition within a U.S. foreign-trade zone and then directly exported to a USMCA Party.
Supporters argue
Supporters argue this amendment removes an existing ambiguity or unintended barrier, ensuring that goods processed in FTZs and destined for USMCA partners are not subject to duties, thereby fostering U.S. export competitiveness and supporting domestic jobs.
Critics contend
Critics may suggest that while clarifying, this provision could be seen as formalizing a specific carve-out that might reduce potential tariff revenue, even if the revenue was not consistently collected due to the USMCA agreement.
Tradeoffs
The provision balances the goal of promoting U.S. export competitiveness through FTZs against potential, albeit likely minor, implications for federal tariff revenue and the principle of uniform tariff application.
Section 3(b)
New Harmonized Tariff Schedule Subheading
This section amends the Harmonized Tariff Schedule of the United States (HTS) by inserting a new subheading, 9801.00.95. This new subheading explicitly grants 'Free' duty treatment to merchandise that is subject to USMCA duty deferral restrictions, admitted into a U.S. foreign-trade zone, manufactured or changed in condition there, and then directly exported to a USMCA Party. This codifies the duty-free treatment into the tariff schedule itself.