Foreign Trade Zones (FTZs) are secure, federally designated areas located within the United States but considered outside of U.S. customs territory. Within an FTZ, businesses can import, manufacture, process, and re-export goods while deferring or reducing customs duties. Retail trade is prohibited, but the zones are powerful tools for manufacturing, warehousing, and logistics operations seeking to compete globally.
Connecticut hosts four established Foreign Trade Zones, each serving distinct regions and industries across the state. Together, they support local economic development by keeping manufacturing and logistics operations stateside, which in turn stimulates employment, strengthens coastal commerce, and attracts investment in advanced manufacturing, energy, and maritime sectors.
The Big Three FTZ Benefits for Businesses
- Duty Deferral
Companies operating within an FTZ are not required to pay import duties until the merchandise leaves the zone and enters the U.S. market. This allows businesses to defer payment, improving cash flow, reducing financing costs, and providing flexibility to manage inventory and production schedules more efficiently.
- Duty Exemption on Re-Exports
When imported goods are re-exported from an FTZ, no duty is paid because the products are considered to have never entered U.S. commerce. This exemption supports companies engaged in global trade and export-oriented manufacturing. (Note: There may be exceptions for goods sent to Canada or Mexico under the USMCA.)
- Inverted Tariffs on Imports
If imported components are transformed within an FTZ into a finished product that carries a lower tariff rate, companies may qualify to apply that lower finished-product duty rate to their imports. However, under current “Section 1702” tariffs, this benefit is restricted for most countries, the component identity and tariff rate must be locked in upon entry to the FTZ.
Connecticut’s Four Foreign Trade Zones
- FTZ #71 – Windsor Locks
Grantee: Economic and Industrial Development Commission of Windsor Locks
Coverage: Hartford, Litchfield, Middlesex, Tolland, and Windham counties (~2,000 acres)
Fees: $7,500 initial access; $5,000 annual renewal - FTZ #76 – Bridgeport
Grantee: Bridgeport Port Authority
Coverage: Fairfield and Litchfield Counties, part of New Haven County (57 acres)
Fees: $2,500 for up to two users per site; $500 for each additional user - FTZ #162 – New Haven
Grantee: Greater New Haven Chamber of Commerce
Coverage: Port of New Haven (366 acres)
Facilities: Petroleum, scrap metal, break bulk, and general cargo - FTZ #208 – New London
Grantee: New London Foreign Trade Zone Commission
Coverage: New London County
Fees: $7,500 annual operator fee; $5,000 yearly renewal
For information about how FTZs can support your business or region, contact the grantees of Connecticut’s FTZs directly via the Zone Information – FTZ directory