Duty Exemption on Re-Exports

Another advantage to using the Foreign Trade Zone, is the elimination of duty on items / product that is re-exported back out of the United States.  If you purchase items from China, import them into the US – typically you would pay the duty on those items the minute they pass through Customs.  When your items are sent directly to a FTZ, no duty is paid until they leave the FTZ. 

Let me give you an example of how Exemption on RE-Exports might save your company money:

If an Automotive Aftermarket Distributor imports a part from China at a 5% duty rate, and this product is put into the FTZ after clearing Customs, no duty has been paid on these items.  If the product is shipped to a US, Canadian or Mexican company then duty will be paid – but, if the product is RE-EXPORTED outside of North America then NO DUTY will be paid.  This provides the Distributor with an automatic 5% increase in profit on that item.