U.S. FTZs on the Hill: What we are Hearing in D.C.

The NAFTZ has received a lot of questions and comments about the tariff actions implemented by the current Trump Administration.  The PF status admission restriction for U.S. FTZs has had unanticipated impacts to operations.  NAFTZ is sharing your concerns in Washington, DC.  Here is a recap of what we are hearing in response and actions you can take to help get the message heard by the Administration and Congress.

Administration Perspective

Throughout March and April, NAFTZ sent multiple letters to the USTR, Secretary of Commerce, Secretary of Treasury, and members of their staff explain the situation the PF status restriction is causing for U.S. companies in the FTZ program.  So far, we have received no response from any of the Administration offices.  NAFTZ has talked with other trade associations that are trying to communicate with the Administration about the tariffs, and their experience is the same.  The Administration does not appear to be taking many meetings with Trade Associations, while having limited consultations directly with individual company executives.

Congressional Perspective

While there are some Representatives and Senators introducing legislation to either eliminate current tariffs or remove the ability for the President to implement future tariffs under IEEPA powers, such efforts are not expected to pass in either chamber and almost certainly will not be upheld if vetoed by the President. 

While NAFTZ found some Congressional offices sympathetic to the PF status situation, Congress appears to be taking a “wait and see” approach.  Many offices referenced the tariffs being “on pause” and didn’t acknowledge that there is actually a 10%, across the board, tariff on most imported goods. Congressional offices didn’t anticipate impact for U.S. companies until later in the year, if at all.  They also feel any impact for U.S. companies is temporary, and that future negotiations with individual countries will provide the desired outcomes of the Administration.

The Message We Need to Deliver, and Next Steps

U.S. FTZs were created by Congress to incentivize investment in U.S. value-add operations.  The goals of the program are the same as the goals of the Administration – increased manufacturing in the U.S., highly-skilled jobs for Americans, and global competitiveness for U.S. operations.

Trade remedy tariffs have inadvertently curtailed these goals, but Congressional members do have influence with the Administration through direct dialog.  They need to hear from U.S. FTZs about the current impact of the tariffs on your operations.  They need to understand how the PF status restriction is creating unintended cost increases, and extraneous uncertainty as the tariffs fluctuate.  They need to hear from multiple sources that the Executive Orders and future actions need to be modified to address the unintended consequences to U.S. manufacturing and distribution.

NAFTZ is creating a template to be completed by companies to share your story.  The first one for manufacturing U.S. FTZs, outlining the impact on inverted tariff benefit, can be found here. We’ll also soon be publishing similar templates for Distribution U.S. FTZs and for Grantees.  To use the template, fill in the blue highlights with your information, and we can help with the contact information in yellow highlight. Call your Congressional members - If your company executive is comfortable reaching out to Congress directly, you can use this as a call script.  Write to your Congressional members – This template can also be used as a direct letter to your Congress members and/or the Administration, you can use this to populate your letter or sign on to the same letter being sent by the NAFTZ.  Share your story through the NAFTZ - Send your information to us, and we’ll collect member stories to share, named or anonymously. Just complete this template and send it to our Director of Advocacy, Melissa Irmen, at mirmen@naftz.org.  Melissa will compile the documented stories to share in our Congressional and Administration outreach efforts.

We need your specific examples to draw attention to the U.S. FTZ impact and to help Congress and the Administration understand the important role the program plays in the U.S. economy.