A foreign trade zone is a designated area in the United States where companies can set up operations with exempted or deferred tariffs on foreign merchandise. FTZs make U.S. manufacturing more competitive by reducing or eliminating unfair tax burdens on companies that make or assemble finished products using foreign components.
Merchandise may be stored within a Foreign Trade Zone for an unlimited period of time and avoid all duties and excise taxes.
Merchandise may be opened, examined, assembled, mixed, cleaned, labeled or repackaged within a zone.
Merchandise may be displayed, sampled or examined within the zone.
Waste materials and damaged merchandise may be destroyed within the zone to avoid duties.