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NAFTZ’s Irmen Witnesses Zones’ Changing Role
[ July 10, 2026 // Gary Burrows ]By Melissa Irmen
Q: How is the current U.S. free-trade zone environment materially different from the underutilized expansion era of the late 1980s/early 1990s?
A: The 1980s saw key congressional changes to the program that increased its usage in manufacturing in the U.S. In that span, the U.S. FTZ program expanded rapidly, helping manufacturers overcome tariff disadvantages that often favored imported finished goods over domestic production. U.S. FTZs supported investment and job growth across industries ranging from automotive and pharmaceuticals to electronics, shipbuilding and energy, while National Association of Foreign Trade Zones (NAFTZ) championed key regulatory and operational reforms that streamlined zone administration and expanded participation.
By 1990, there were 175 zone projects and 212 subzones located in 48 states and Puerto Rico – with 2,210 firms employing 216,350 U.S. workers.
Also, there were important Foreign-Trade Zone Board regulation updates implemented in 2008 when – following the global financial crisis – President Obama directed federal agencies to respond by facilitating and simplifying the process to secure U.S. FTZ status; this created what’s called Alternative Site Framework (ASF) zone projects around the country. An ASF makes the designation process for a new U.S. FTZ site faster and more efficient. This also increased utilization of the program to make U.S. operations more globally competitive.
Q: What percentage of designated U.S. FTZs are active today?
A: This is not calculated in the annual report published by the U.S. FTZ Board.
In the 2024 report, published in December 2025, containing the latest data we have, there were 199 U.S. FTZs active during the year, with 381 active production operations. And nearly 543,000 people were employed within 1,300 active U.S. FTZ operations during the year.
Q: Are U.S. free-trade zones now primarily tariff-management tools rather than traditional economic-development zones?
A: Unlike many international “free trade zones,” which often operate as export-focused areas with special tax or regulatory incentives, U.S. Foreign-Trade Zones (U.S. FTZs) remain fully subject to all U.S. customs, trade, labor, environmental and security laws.
Rather than serving as separate economic jurisdictions, U.S. FTZs provide duty-related benefits that help users such as manufacturers, distributors and logistics companies remain globally competitive while operating under the oversight of the U.S. Foreign-Trade Zones Board and U.S. Customs and Border Protection.
The program is designed to encourage domestic investment, production and job creation within a highly regulated framework. While approved operators gain valuable cash-flow and tariff-related benefits, participation comes with rigorous federal oversight and compliance requirements.
Authorized by Congress, the U.S. FTZ program serves as a powerful economic development tool, helping create and retain U.S. jobs, attract capital investment, and strengthen strategic industry clusters and supply chains across the country.
Q: Has the post-Section 301 environment fundamentally changed utilization rates?
A: The increase in tariff awareness brought about by all the trade remedy actions in 2025 and 2026 have highlighted the need for U.S. companies to find ways to mitigate tariff impact while adjusting their supply chains and changing sourcing options.
The U.S. FTZ program can be part of that, serving as a necessary bridge as companies adapt.
So, we’ve seen an increase in interest in the program. Applications to the U.S. FTZ Board have increased, and inquiries to the grantees are on the rise. Furthermore, in an NAFTZ membership survey (https://tinyurl.com/mb69n3rv) issued earlier this year, nearly half (49 percent) of responding U.S. FTZ users and operators reported increased activity in 2025, from higher production levels to growing inventory volumes and exports. Another 18 percent said activity held steady. And 83 percent of responding U.S. FTZ grantees (economic development leaders that administer the program locally) expected increased activity throughout 2026.
Q: How much activity growth is genuine reshoring versus inventory/tariff optimization?
A: There is no clear measurement for this, and it is not data that is reported on by the U.S. FTZ Board.
Anecdotally, we are hearing from companies that are looking to use the U.S. FTZ program both to maintain globally competitive U.S. operations – particularly for exports and managing the cash-flow impacts of higher tariffs – and to support reshoring efforts by helping offset the cost of tariffs on imported inputs needed for domestic production.
Q: Are smaller community U.S. FTZs still struggling for activation while major port/manufacturing zones dominate usage?
A: Actually, this isn’t quite the case. With U.S. FTZ projects in all 50 states and Puerto Rico, the program is accessible to all companies that are within an acceptable distance of a port of entry. That includes airports and inland ports as well as seaports.
The highest area of program usage tends to be where there are U.S. operations that require imports for their business.
Melissa Irman is director of advocacy and strategic relations for the National Association of Foreign-Trade Zones, which represents public and private-sector FTZs across the U.S.
