FTZ Duty Savings Estimator
This free calculator estimates the annual duty savings a manufacturer could capture by producing in a U.S. foreign-trade zone, across the four classic FTZ benefits: inverted tariff (paying the finished-product rate instead of higher input rates), scrap and waste (no duty on material that never enters commerce), duty deferral (the carrying-cost value of paying duty at entry instead of at import), and export savings (duty never owed on production that leaves the country). The math is an exact port of the International Trade Administration's Duty Savings Estimator worksheet, verified cell by cell, with honest 2026 caveats below.
Primary source: International Trade Administration, Duty Savings Estimator for FTZ Production, whose workbook formulas this tool ports exactly (verification notes in the FAQ).
Step 1: Finished product and production profile
Step 2: Imported inputs used in production
| Input name | Duty rate (%) | Scrap/waste (%) | Avg. days in inventory | Annual value in product ($) | |
|---|---|---|---|---|---|
Estimated annual duty savings
Inverted tariff
$0.00
Scrap / waste
$0.00
Duty deferral
$0.00
Export related
$0.00
Total estimated annual savings
$0.00
Per-input breakdown
| Input | Inverted tariff | Scrap/waste | Duty deferral | Export related | Total |
|---|---|---|---|---|---|
| Input 1 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| Input 2 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| Input 3 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
Read before relying on the number (2026 caveats)
- Section 232 and related orders require privileged foreign status in zones, which blocks the inverted-tariff benefit for those duty layers. Inversion math here applies cleanly to ordinary MFN rates only; see our FTZ production-authority guide.
- Weekly-entry MPF consolidation, often the largest FTZ benefit, is not part of the ITA model and is not estimated here.
- Zone operating, activation, and compliance costs are excluded; this is the savings side only. Compare against bonded-warehouse alternatives and the wider drawback options before deciding.
FTZ savings FAQ
What is inverted tariff savings in a foreign-trade zone?
Inverted tariff savings arise when your imported inputs carry a higher duty rate than your finished product. With production authority in an FTZ, you can choose to pay duty at the finished-product rate when goods leave the zone for U.S. commerce, instead of the higher input rates, and the difference is the saving. The calculator applies this only to the share of production consumed domestically, because exports never pay U.S. duty at all.
Does the inverted tariff benefit still work for Section 232 and Section 301 goods in 2026?
Mostly no, and this is the biggest change since the government worksheet was written. The Section 232 proclamations and related orders require covered merchandise admitted to an FTZ to hold privileged foreign status, which locks in the duty rate at admission and blocks the inverted-tariff play for those duty layers. The inversion benefit still works on ordinary MFN rates. Model your 232/301 exposure separately before counting inversion savings on affected inputs.
Is this the official government FTZ calculator?
It is a faithful, independently verified port of the International Trade Administration's Duty Savings Estimator for FTZ Production, the worksheet published at trade.gov. We extracted the workbook's formulas and verified this calculator against the original spreadsheet cell by cell across random and edge-case scenarios before publishing. The ITA worksheet dates from the NAFTA era; we relabeled those columns USMCA, whose Article 2.5 carries the same export restriction forward.
Why do exports to Canada and Mexico get less FTZ benefit than other exports?
Because USMCA, like NAFTA before it, restricts duty relief on goods exported to member countries: you effectively pay the lower of the input duty or the finished-product duty rather than escaping duty entirely. The calculator therefore credits USMCA-bound production with only the deferral and inversion components, while production exported outside USMCA is credited with the full duty never paid.
What FTZ savings does this calculator NOT include?
Several, and they can be large. It does not model weekly-entry consolidation, which caps merchandise processing fees and is often the single biggest FTZ benefit for high-volume importers. It also excludes zone operating costs, application and activation costs, inventory-control requirements, and state or local incentives. Treat the output as the duty-math slice of a business case, not the whole case.
How accurate is the duty deferral estimate?
It values deferral as your interest rate applied to the duty for the average days your inputs sit in inventory, on the domestic share of production. That is the ITA worksheet's method and it is a reasonable working-capital approximation. Your real benefit depends on your actual cost of capital and inventory turns, so use your treasury team's rate in the interest field.
For general reference only. See compliance disclaimer.