FTZ’ine May 2025
April 30, 2025
FTZ’ine July 2025
June 25, 2025
No Cake And Ice Cream Yet
It was another month of dynamic trade developments for the foreign-trade zone community. While there is cause for optimism that trade terms will stabilize soon, too much remains unsettled to do any celebrating just yet.
Negotiations with China resulted in a temporary pause in the sky-high rates FTZs had been paying on their imports. But recent rhetoric from Washington suggests the pause won’t last past the 90 days of the agreement. If it even lasts that long.
The U.S. Court of International Trade ruled that the use of IEEPA to place a 10% additional tariff on all imports overstepped presidential authority. The IEEPA tariffs are still being collected until higher courts make a final ruling. The financial stakes are HUGE for both sides.
An investment deal in U.S. Steel prompted the doubling of Section 232 tariffs on imported steel and aluminum beginning this Thursday. Nothing on the table suggests those 50% rates will be reduced anytime soon. Zones need to prepare accordingly.
Foreign-trade zone applications are down. Way down. Staff losses at the Foreign-Trade Zones Board and the loss of the NPF status option appear to be taking their toll. Bonded Warehouse applications? Still overwhelming CBP in certain ports.
Top Story: Will CIT Ruling Lead To FTZ Tariff Relief?
The U.S. Court of International Trade, located at the foot of the Brooklyn Bridge in New York City, ruled last month that President Trump overstepped his powers in using the International Emergency Economic Powers Act of 1977 (IEEPA) to impose tariffs on every single trading partner of the United States.
The unanimous ruling of the three-judge panel reversed the Executive Orders imposing a minimum 10 percent tariff on all U.S. imports, as well as the “reciprocal” tariffs announced by the President on April 2nd. The administration immediately filed an appeal in the Federal Circuit, and the issue is likely to end up before the Supreme Court.
Many questions about the ruling’s impact on foreign-trade zones remain unanswered. If the Supreme Court upholds the CIT ruling in total, how will duties paid be refunded? What about MPF Fees generated by entries made too long by the sheer number of reciprocal tariff codes? Duties paid on privileged foreign status merchandise that otherwise would have been inverted? Its going to be another exciting month in trade.
Deputy Assistant Attorney General Brett Shumate said the ruling striking down the IEEPA tariffs would strangle the President’s efforts to strike new trade deals between now and July 8, including with leading trading partners such as Japan, India and the European Union.
“An injunction would be extremely disruptive while the President is in the middle of foreign negotiations with other countries about trade deficits and about the fentanyl crisis,” Shumate said in arguments to the CIT.
Last month we reported that the U.S. had come to an agreement on reciprocal tariffs with one trading partner, the United Kingdom. The Administration insisted that several other agreements were in the works, but in a month’s time, none have been completed. Reuters reported that the Trump administration has requested countries provide their best offer on trade negotiations by tomorrow. It seems unlikely the Administration will have much bargaining power to make that happen until the Supreme Court issues a ruling in the IEEPA case.
Then there is the question of what happens if the Supreme Court agrees with the CIT ruling. “Anybody that has had to pay tariffs so far will be able to get them refunded,” said Ilya Somin, a professor of law at George Mason University, who helped argue the case brought by several small businesses.
The lead plaintiff at the CIT was V.O.S. Selections, a New York-based wine company, and several small businesses joined the suit. A similar but separate case filed by Oregon and 11 other states was included in the ruling, delivered by a three-judge panel that included Obama appointee Gary Katzmann, Reagan appointee Jane Restani and Trump appointee Timothy Reif.
The President can impose the same tariffs under other laws, according to Nazak Nikakhtar, who worked on trade issues at the Commerce Department during the first Trump administration and is now a partner at the law firm Wiley Rein. “The President still has ample authority to impose reciprocal tariffs, just through other legal means,” Nikakhtar said.
But Somin, the George Mason University law professor, was skeptical that President Trump would be able to use other authorities to exactly replicate his reciprocal tariff program.
“I don’t think they could impose anything this sweeping under another statute,” Somin said. “The reason why they wanted to use IEEPA in the first place is because they thought that it could grant them this vast, sweeping authority they couldn’t get otherwise.”
The CIT ruling does not affect other tariffs currently in effect, such as those under Section 232 of the Trade Expansion Act of 1962, which allows the president to levy new duties on national security grounds. The Trump Administration has already launched several other Section 232 investigations that could lead to tariffs on semiconductors, copper, pharmaceuticals and a number of other products this fall.
CBP Pivots From Engagement To Enforcement
In 2024, U.S. Customs and Border Protection (CBP) sponsored a ‘Trade Facilitation and Cargo Security’ Summit. Last month CBP held a ‘Trade and Cargo Security Summit’ in New Orleans. Missing this year was the ‘facilitation’ of legitimate trade, and the new focus on enforcement actions was quite evident to everyone that participated in this year’s CBP event.
That was not the only sign that CBP is transitioning to a focus on enforcement versus engagement with legitimate trade.
CBP cancelled some meetings of the Trade Support Network (TSN), although there is still one on the calendar for September. The Commercial Operations Advisory Council (COAC) is still active but generally CBP seems to be closing its outreach to international traders.
CBP cancelled the ACE Biweekly Trade Support Call that was scheduled for the middle of May, and then announced at the end of the month that the calls were cancelled permanently. In-person ACE outreach events have been switched to webinars.
Questions about how the changes to CBP enforcement protocols will affect your FTZ? Contact us at info@iscm.co.
Staff Departures Affect FTZ Board
The Foreign-Trade Zones Board has lost 40% of its Staff Examiners in the last 7 months.
Experienced contributors Christopher Kemp and Diane Finver have left without being replaced, as has relative newcomer Kolade Osho. This has caused a reshuffling of responsibilities amongst the Board Staff, which has surprised some Grantees when new applications or communications are sent to the Board, and answered by someone else.
After we reported a surge in application activity for the beginning of 2025, FTZ application activity has dropped sharply. From April to May, Staff actions are down a third and Board actions have been cut in half.
With the advent and adoption of the Alternative Site Framework, the majority of applications taken up by the FTZ Board itself are Production Notifications. No doubt the elimination of NPF status has had a chilling effect on such applications. The staff losses and resulting reassignments are likely causing some delays in application handling as well.
Reports from Ports around the country are that applications for Bonded Warehouses remain strong with some Ports (like L.A., sigh) reporting application backlogs greater than 6 months.
Foreign-Trade Zones Still Feeling The Whipsaw On Tariffs
Foreign-Trade Zones breathed a sigh of relief when the U.S. and China negotiated a 90-day truce to their escalating trade battle. Then last week President Trump accused Beijing of violating the terms of the truce by continuing to limit access to rare earth minerals.
The fragile agreement was intended to give both sides time to reach a larger deal that would avert an all-out trade war, but negotiations are clearly moving in the wrong direction. Foreign-trade zones need to brace for what might happen after the cooling-off period ends.
Also during the month the federal government helped broker a deal whereby U.S. Steel received a cash infusion from Nippon Steel of Japan. A condition of that deal granted the U.S. government a ‘Golden Share’ in the venture, ostensibly to insure that U.S. Steel maintains capacity for steel production in the U.S. To help ensure the growing value of that so-called ‘Golden Share’, the government announced that Section 232 additional tariffs on imported steel and aluminum will double starting this Thursday.
Several other major changes in import tariffs will keep foreign-trade zone operators and users busy this month.
If the CIT ruling stands, NPF status would be reinstated, allowing zones the ability to use zone status to help manage the impact of new tariffs as they rise and fall. And manufacturers would again be eligible for inverted tariff benefits.
But if the Supreme Court upholds the CIT ruling, de minimus entries from China will also be reinstated. That is not only a nightmare scenario for U.S. Customs, which could be forced to process refunds, but also for FTZ operators who would suddenly find themselves competing again with duty-free shipments from China.
The foreign governments affected by reciprocal tariffs are also taking a wait-and-see approach to negotiations. Without the potential of reciprocal tariffs actually going into effect, there would not seem to be a reason to make any concessions to the United States, regardless of the potential threats to trading partners. So FTZs are left to wonder what will happen in July when the reciprocal tariffs are scheduled to go into effect.
China tariffs are another wildcard that are hard for FTZs to predict. Early last month, Treasury Secretary Scott Bessent and Jamieson Greer, the U.S. Trade Representative, met in Switzerland with their Chinese counterparts. After a weekend of negotiations both sides agreed to lower their tariffs on each other for 90 days, and to hold additional talks on a more comprehensive agreement. No such talks have taken place. Although it seems unlikely that China tariffs would return to the 145%+ level that was in place before the agreement, they would certainly rise from the 30% level where they are now. That would force changes to operational patterns for foreign-trade zones.
Further adding to the uncertainty for FTZs is that even if the Executive Orders under IEEPA are invalidated by the Courts, The President can still exercise his powers under other provisions of the law. Implementing tariffs under those provisions is more onerous and time-consuming, but still possible as evidenced by the Section 201, Section 301, and Section 232 tariffs that are already in place.
U.S. Imports Drop Record Amount
U.S. imports dropped 19.8% in April, a record, as the U.S. economy takes stock of the new tariffs. Port authorities around the country felt the wild swing after the 5.7% uptick of goods imported in March, as U.S. retailers and consumers made overseas purchases in advance of the new April 2nd tariffs.
The U.S. Department of Commerce released preliminary April import numbers just last week.
The new estimates show that America’s trade deficit with the rest of the world narrowed by 46% to $87.6 billion, according to Marketwatch, much lower than the $143 billion projected by economists.
That number could boomerang though as importers race to beat the end of the current 90-day truce in China tariffs. While negotiations were supposed to take place to cement a tariff reduction, no negotiations have taken place and all signs point to China tariffs moving back up. Many importers will be racing to bring product in before that happens.
The Trump administration has accused China of violating the agreement reached to reduce those high levels, leading to speculation that fresh increases are coming this summer.
Details of China’s infractions have not been released, but U.S. Trade Representative Jamieson Greer told the Wall Street Journal recently that the administration believes China has been “reluctant” to approve exports of rare-earth materials.
FTZ Staff Activity
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-104-2025) in FTZ 202 on behalf of I.L.S., Inc., Carson, CA on April 23, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-105-2025) in FTZ 281 on behalf of Prowinch, LLC, Miami, FL on April 24, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-106-2025) in FTZ 64 on behalf of Sunlight Medical, Inc., Jacksonville, FL on April 25, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-107-2025) in FTZ 70 on behalf of ThyssenKrupp Supply Chain Services, Brownstown Charter Township, MI on April 28, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-108-2025) in FTZ 38K on behalf of ZF Transmissions Gray Court, LLC, Gray Court, SC on May 21, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-109-2025) in FTZ 170C on behalf of Sazerac Company, Inc., New Albany, IN on April 30, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-110-2025) in FTZ 75 on behalf of Catalina Components, Inc., Chandler, AZ on April 30, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-111-2025) in FTZ 28 on behalf of East Coast Seafood, LLC DBA Seatrade International, New Bedford, MA on May 2, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-112-2025) in FTZ 28 on behalf of JS International, Inc., Fall River, MA on May 2, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-113-2025) in FTZ 52C on behalf of Triple Crown Warehousing, Inc., Islip, NY on May 6, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-1146-2025) in FTZ 17F on behalf of Panasonic Energy Corporation of North America, Atchison, KS on May 7, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-115-2025) in FTZ 70 on behalf of Lucerne International, Inc., Auburn Hills, MI on May 7, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-116-2025) in FTZ 35N on behalf of Communications Test Design, Inc., West Chester, PA on May 8, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-117-2025) in FTZ 72 on behalf of iwis drive systems, LLC, Whitestown, IN on May 10, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-118-2025) in FTZ 104M on behalf of Port City Logistics, Inc., Savannah, GA on May 9, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-119-2025) in FTZ 40N on behalf of Air Venturi, Ltd., Solon, OH on May 13, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-120-2025) in FTZ 104 on behalf of Weida Freight System, Rincon, GA on May 13, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-121-2025) in FTZ 22 on behalf of Power Stop, LLC, Hodgkins, IL on May 15, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-122-2025) in FTZ 125I on behalf of YSN Imports LLC dba Flame King on May 16, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-123-2025) in FTZ 70AB on behalf of Waterfront Petroleum Terminal Company, Detroit, MI on May 16, 2025
- FTZ Board Staff processed a processed a Termination (S-124-2025) in FTZ 171B on behalf of CCZJV-GPX, Baytown, TX on May 19, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-125-2025) in FTZ 230 on behalf of Preger & Wertenteil, Inc. dba Gold Medal International, Greensboro, NC on May 20, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-126-2025) in FTZ 77 on behalf of Pfizer, Inc., Memphis, TN on May 20, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-127-2025) in FTZ 230K on behalf of Qorvo US, Inc., Greensboro/High Point, NC on May 21, 2025
- FTZ Board Staff processed a processed a Minor Boundary Modification (S-128-2025) in FTZ 147K on behalf of REP Fitness, LLC, Carlisle, PA on May 21, 2025
Foreign-Trade Zone Board Activity
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- Tight Line Composites LLC. submitted a notification of proposed production activity for carbon fiber profiles for wind turbine spar caps within Foreign-Trade Zone 102 in Earth City, Missouri. MORE
- SNRA Commodities, Inc. received approval to operate their Fabens, Texas facilities as Foreign-Trade Zone 68B. MORE
- Puerto Rico Energy LLC received approval to expand Foreign-Trade Zone 7F in Carolina, Puerto Rico. MORE
- PINNACLEMOD LLC submitted a notification of proposed production activity for prefabricated modular steel buildings within Foreign-Trade Zone 173 in Aberdeen, Washington. MORE
- Kaiser Aluminum Fabricated Products, LLC withdrew its notification of proposed production activity for aluminum products within Foreign-Trade Zone 207 in Richmond, Virginia. MORE
- Grand River Aseptic Manufacturing submitted a notification of proposed production activity for pharmaceutical products within Foreign-Trade Zone 189 in Grand Rapids and Caledonia, Michigan. MORE
No Cake And Ice Cream Yet:
It was another month of dynamic trade developments for the foreign-trade zone community. While there is cause for optimism that trade terms will stabilize soon, too much remains unsettled to do any celebrating just yet.
Negotiations with China resulted in a temporary pause in the sky-high rates FTZs had been paying on their imports. But recent rhetoric from Washington suggests the pause won’t last past the 90 days of the agreement. If it even lasts that long.
The U.S. Court of International Trade ruled that the use of IEEPA to place a 10% additional tariff on all imports overstepped presidential authority. The IEEPA tariffs are still being collected until higher courts make a final ruling. The financial stakes are HUGE for both sides.
An investment deal in U.S. Steel prompted the doubling of Section 232 tariffs on imported steel and aluminum beginning this Thursday. Nothing on the table suggests those 50% rates will be reduced anytime soon. Zones need to prepare accordingly.
Foreign-trade zone applications are down. Way down. Staff losses at the Foreign-Trade Zones Board and the loss of the NPF status option appear to be taking their toll. Bonded Warehouse applications? Still overwhelming CBP in certain ports.