The advent of higher tariffs under the Trump administration is prompting US importers and manufacturers to mitigate higher costs through Foreign-Trade Zones (FTZs), according to Trey Boring, President of IMS Worldwide.
Boring spoke at the Intermodal Association of North America (IANA) Expo 2026 in Long Beach, California, on September 15.
“And recently, with the advent of a lot of the newer duty rates, what we do have now is a broader spectrum of companies needing foreign-trade zones. So, those of us in the service-provider realm—if you’re a freight forwarder, if you’re somebody that moves containers for people—this has become a bigger deal because more and more companies are now pushing FTZs into their supply chain … What an FTZ … basically allows us to establish is an area like a bonded warehouse, except one that is a little more free and open to run like a business.”
The structure of the FTZ is overseen by the US Department of Commerce:
“The staff for that FTZ Board is housed within the Department of Commerce. That is where you file applications. It is controlled and run locally by Customs and Border Protection, just like they do any other bonded program. They make sure we’re moving freight securely, we … properly account for it, we’ve got our documents filled out and filed. The FTZ allows us to manage or mitigate our duty liability, the tariffs we pay … when we pay it. It’s not an elimination program … If we bring things in, we re-export them … You still have to pay those duties, but at different varying levels, but you get to manage when you do. And that’s really what the program is all about.”
Boring said small ports can help establish new FTZ service areas within their counties to facilitate FTZ growth:
“A small port can establish an … area in the county and designate this: ‘This is my service area.’ And within my service area, any company can apply for a foreign-trade zone at any place in the county. That would support an expedited FTZ application.”
As a result, the cost of capital to produce a product can be reduced, and this can enhance cash flow. Boring said the Trump administration is also favorably disposed toward FTZs being used to support manufacturing in the United States, so this status could enhance US approvals.
The result can be increased profitability:
“Let’s say it’s going to take me $150,000 just in sunk costs upfront to get one approved. Once it’s approved, it’s going to cost me $200,000 a year to run it: software costs, different things, whatever, personnel. You have to have compliance now … What if my gross savings through deferral and exemptions and exports and all this—if my total savings is $1 million a year? Then I don’t have to talk you into doing that.”
