U.S. Senators Katie Britt, Tim Scott Introduce Legislation to Strengthen Domestic Manufacturing in Foreign-Trade Zones

WASHINGTON , D.C. – U.S. Senators Katie Britt (R-Ala.) and Tim Scott (R-S.C.) introduced the Foreign-Trade Zone Export Enhancement Act of 2026 to allow goods produced in Foreign-Trade Zones (FTZs) to be exported duty-free to Mexico and Canada. This bill levels the playing field for American manufacturers by removing a trade disadvantage that prevents goods produced in a U.S. FTZ from being exported duty-free to Mexico and Canada under the United States-Mexico-Canada Agreement (USMCA), thereby undercutting U.S. competitiveness. “I’m proud to support Alabama’s world-class manufacturing sector, including those in our thriving automotive and aerospace industries, which continue to drive growth and strengthen our state’s industrial base. This legislation would help ensure Alabama companies that utilize our FTZs aren’t operating at a global competitive disadvantage. This is a commonsense step Congress can take to strengthen domestic manufacturing and support hardworking Americans,” said Senator Britt. Congress created the U.S. FTZ program in 1934 to encourage domestic manufacturing and distribution, specifically in cases where foreign countries maintain a tariff advantage. $133 billion of merchandise was exported from U.S. FTZs in 2024, accounting for nearly 7% of total U.S. goods exports that year. “South Carolina companies operating in Foreign-Trade Zones make significant contributions to the Palmetto State’s economy,” said Senator Scott. “My bill levels the playing field for our businesses by making sure American manufacturing remains globally competitive, boosting USA-made exports, and supporting American jobs.” Under USMCA, U.S. manufacturers operating within U.S. FTZs are required to pay a duty to the U.S. government on inputs used in products made domestically by American workers that are exported to Canada and Mexico. However, Mexico and Canada have implemented loopholes to avoid this requirement. This creates a significant disadvantage to U.S. FTZs. Senator Britt is a champion for American workers, families, and companies and has continued fighting to level the playing field for domestic manufacturers. Earlier this year, she introduced the Fighting Trade Cheats Act , bipartisan legislation to strengthen U.S. trade law enforcement and empower American manufacturers to take action against bad actors that engage in customs fraud. You can read the full text of the bill here . ###