Loading
Free tool, no sign-up
Foreign trade zone savings calculator
Estimate what a foreign trade zone saves a US manufacturer each year. The duty math matches the International Trade Administration's Duty Savings Estimator worksheet, and the weekly entry MPF saving is added on top.
Finished product
%
%
%
%
Foreign inputs
%
%
$
%
%
$
Annual duty savings (ITA method)
Inverted tariff
Input rate above finished rate, domestic sales
$43,818.34
Duty deferral
Interest on duty not paid while in the zone
$434.82
Scrap and waste
No duty on input lost in production
$3,731.99
Export related
Exports, plus deferral and inversion on USMCA exports
$21,275.67
Total duty savings
$69,260.82
Weekly entry MPF savings
$
MPF, one entry per shipment
520 x $173.20
$90,064.00
MPF, weekly entries
52 x $670.86, FY2027 limits
$34,884.72
MPF saved per year
$55,179.28
Duty plus MPF savings
$124,440.10
Before zone operating, bond and compliance costs.
By input
| Input | Inverted | Scrap | Deferral | USMCA deferral | USMCA inverted | Other exports | Total |
|---|---|---|---|---|---|---|---|
| Input A | $35,608.32 | $3,214.64 | $356.69 | $47.56 | $4,747.78 | $11,572.70 | $55,547.69 |
| Input B | $8,210.02 | $517.35 | $78.13 | $10.42 | $1,094.67 | $3,802.54 | $13,713.13 |
Where FTZ savings come from
Inverted tariff: when a foreign input carries a higher duty rate than the finished product made from it, a zone user can elect to pay the finished product rate on goods sold in the US. The saving is the rate gap times the value of the input that ends up in domestic sales.
Duty deferral: duty is paid when goods leave the zone for consumption, not when they arrive. The saving is the interest on that duty for the days the input spends in the zone.
Scrap and waste: no duty is owed on the part of the input that is lost or destroyed in production. Exports: goods shipped abroad from the zone never pay US duty. For exports to Canada and Mexico the worksheet counts only the deferral and inverted tariff savings, not the full duty.
The ITA formulas
For each input, with domestic share c = 1 minus both export shares: inverted = (input rate minus finished rate) x c x (1 minus scrap) x value, and 0 when the input rate is not higher. Scrap = input rate x scrap share x value. Deferral = days / 365 x input rate x interest x c x (1 minus scrap) x value.
Export related = the same deferral and inverted terms on the Canada and Mexico share, plus input rate x other export share x (1 minus scrap) x value. Each term is rounded to cents, as in the worksheet.
ITA notes the estimator only fits inputs at standard HTSUS rates. AD/CVD and Section 201, 232 and 301 duties are fixed when goods are admitted, so leave those inputs out.
Weekly entry MPF
Outside a zone, each shipment is usually its own entry and pays MPF up to the per-entry maximum. A zone user can file one estimated entry for everything withdrawn in a 7-day period, and 19 USC 1484(i)(1) treats it as a single entry for the MPF with the minimum and maximum applied per entry. With many shipments a week, the weekly entry hits the maximum once instead of paying the ad valorem fee on every shipment.
The calculator spreads value evenly across entries and uses the MPF limits in force today. Real savings depend on how shipments cluster.
Worked examples
ITA worksheet example, two inputs
- Finished rate 2.5%, interest 5%, 10% to Canada/Mexico, 15% to others
- Input A: 6.5%, 4% scrap, 45 days, 1,236,400
- Input B: 4.4%, 2% scrap, 30 days, 587,900
- Inverted 43,818.34; scrap 3,731.99; deferral 434.82; exports 21,275.67
Total duty savings $69,260.82
Load this exampleWeekly entry MPF
- 26,000,000 a year in 520 shipments of 50,000
- Per shipment 50,000 x 0.3464% = 173.20; x 520 = 90,064.00
- 52 weekly entries of 500,000 hit the 670.86 cap: 34,884.72
MPF saved $55,179.28 a year (FY2027 limits)
Load this exampleFrequently asked questions
›What is an inverted tariff in a foreign trade zone?
An inverted tariff is when an imported component has a higher duty rate than the finished product. In a zone you can pay the finished product rate on the component when the product enters US commerce, saving the difference.
›How is FTZ duty deferral savings calculated?
Days in the zone / 365 x input duty rate x interest rate x domestic share x (1 minus scrap) x annual input value, following the ITA Duty Savings Estimator.
›How much MPF does a weekly entry save?
It depends on volume. Each weekly entry pays MPF once, with the per-entry maximum ($670.86 in FY2027). If you would otherwise file several entries a week below the maximum, the weekly entry can cut MPF sharply.
›Do Section 301 or 232 duties get inverted tariff relief in an FTZ?
Generally no. ITA notes that AD/CVD and Section 201, 232 and 301 duties are locked in when the input arrives in the zone, so the estimator excludes them.
›Why do exports to Canada and Mexico save less?
The ITA worksheet counts only duty deferral and the inverted tariff on the Canada and Mexico share, not the full duty, and this calculator follows it. Ask your zone counsel how USMCA duty-relief rules apply to your exports.
›Does this include the cost of running a zone?
No. Zone activation, operator fees, bond and compliance costs are not included; subtract them before deciding.