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FTZ Savings Estimator Foreign-trade zones

Test a foreign-trade zone on your numbers.

Enter your finished product's duty rate and the inputs you import, and see the yearly duty a zone could save, benefit by benefit.

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FTZ Savings Estimator
Example

Two imported components at 6.5% and 4.4% duty, built into a product dutiable at 2.5%, with 25% of output exported. Change any field to run your own.

Finished product and sales

Imported inputs

Estimated yearly duty savings

$69,260.82

Inverted tariff
$43,818.34
Scrap and waste
$3,731.99
Duty deferral
$434.82
Exports
$21,275.67
Savings by input
InputInverted tariffScrap and wasteDuty deferralExportsTotal
Component A$35,608.32$3,214.64$356.69$16,368.04$55,547.69
Component B$8,210.02$517.35$78.13$4,907.63$13,713.13

Duty savings only, from the ITA worksheet formulas. Zone costs and MPF savings are not included.

A working FTZ savings estimator. Enter the finished product's duty rate, an interest rate and the shares exported to USMCA countries and elsewhere, then up to 15 imported inputs with duty rate, scrap share, days in inventory and yearly value. It shows the yearly total, the savings from inverted tariff, scrap, deferral and exports, and a breakdown by input.

What does the FTZ savings estimator work out?

The duty side of a zone decision, not the cost of running one.

FTZ Savings Estimator

The FTZ savings estimator works out the yearly duty a manufacturer could save by producing in a foreign-trade zone, a secure U.S. site treated as outside customs territory for duty purposes. It adds four benefits: inverted tariff (paying the finished product's lower rate instead of the inputs' rates), scrap and waste (no duty on material that never enters U.S. commerce), deferral (the interest value of paying duty later) and exports (no U.S. duty on goods that leave). The math follows the International Trade Administration's Duty Savings Estimator worksheet, checked against it cell by cell.

Made for
Manufacturers weighing FTZ production authority
You give it
The finished product's rate, export shares and up to 15 inputs
You get back
Yearly savings by benefit and by input

How does it work out the savings?

Four formulas from the ITA worksheet, applied to each input and added up.

FTZ rules · ITA Duty Savings Estimator
BenefitFormulaSource
Inverted tariff(input rate − finished rate) × value used at home, after scrap; zero if the finished rate is higherITA, Duty Savings Estimator for FTZ Production
Scrap and wasteInput rate × scrap share × valueITA, Duty Savings Estimator for FTZ Production
Duty deferralDays in inventory ÷ 365 × input rate × interest rate × value used at homeITA, Duty Savings Estimator for FTZ Production
Exports outside USMCAInput rate × share exported × value, since no U.S. duty is owedITA, Duty Savings Estimator for FTZ Production
Exports to USMCA countriesDeferral and inversion only; full duty relief does not applyUSMCA Article 2.5; ITA worksheet (its NAFTA columns)
Section 232 and 301 inputsAdmitted in privileged foreign status, which fixes the duty at admission and removes the inversion benefitProclamation 11021, clause 12, and CSMS #68253075, Apr 2026; 83 FR 28710, Jun 2018; CSMS #69326983, Jul 23, 2026

Not in this estimator

  • Inputs subject to AD/CVD, Section 201, 232 or 301 duties. The ITA worksheet is not built for them, so this estimate is not either.
  • Weekly entry savings on the merchandise processing fee, often a large FTZ benefit, which the ITA model leaves out.
  • Zone costs: application, activation, operation and inventory control.

A table of the formulas this estimator uses, each with its source: inverted tariff, scrap and waste, duty deferral, exports outside USMCA, exports to USMCA countries, and how Section 232 and 301 inputs are treated. Below it, what the estimator leaves out.

Questions about FTZ savings

Can a bonded warehouse or a TIB lower my tariffs?

Only in specific cases. A bonded warehouse holds goods with duty unpaid for up to five years (19 CFR 144.5) and charges duty at the rate in force on the day they are withdrawn for U.S. consumption (19 CFR 141.69), so it defers duty and avoids it on goods exported from the warehouse, but it cannot lock in today's rate. A TIB lets goods listed in HTS Chapter 98, Subchapter XIII enter without duty if they leave within a year, under a bond for double the duties and fees, and not for goods imported for sale (19 CFR 10.31); CBP can extend the year twice, a year at a time (19 CFR 10.37). A foreign-trade zone is the broader option, and this estimator prices it.

What is inverted tariff savings in a foreign-trade zone?

When your imported inputs carry a higher duty rate than the finished product, a zone with production authority lets you pay the finished product's rate when goods leave the zone for U.S. commerce. The difference is the saving. The estimator applies it only to the share sold in the U.S., since exports pay no U.S. duty at all.

Does inverted tariff still work for Section 232 and 301 goods?

No. Goods subject to Section 232 and Section 301 duties must be admitted to a zone in privileged foreign status, which fixes their duty at admission (Proclamation 11021 and CSMS #68253075 for Section 232 metals, April 2026; CSMS #69326983 for the 2026 Section 301 forced labor duty). Inversion still works on ordinary rates.

Is this the government's FTZ calculator?

It runs the same formulas. The International Trade Administration publishes the Duty Savings Estimator for FTZ Production as a spreadsheet on trade.gov; we took its formulas and checked this version against it cell by cell, rounding where the sheet rounds. The sheet's NAFTA columns are labeled USMCA here.

Why do exports to Canada and Mexico save less?

USMCA limits duty relief on goods exported to member countries, as NAFTA did. The estimator credits USMCA-bound production with deferral and inversion only, and production exported elsewhere with the full duty that is never paid.

What does the estimator leave out?

Weekly entry savings on the merchandise processing fee, often the biggest benefit for high-volume importers, and the costs of a zone: application, activation, operation and inventory control. Treat the result as the duty side of the business case.

Which interest rate should I use for deferral?

Your own cost of capital. The estimator starts at 5%. Deferral is valued as that rate applied to the duty, for the days inputs sit in inventory, on the share sold in the U.S.

Compare a zone with drawback.

Exporters can also get duty back through drawback, up to 99% of the duty paid.

See the duty drawback service See trade advisory

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