U.S. Sen. Tim Scott has introduced legislation aimed at removing a trade disadvantage for American manufacturers operating in U.S. foreign-trade zones, including companies in South Carolina.
Based on a release from U.S. Sen. Tim Scott.
WASHINGTON — U.S. Sen. Tim Scott, R-S.C., introduced the Foreign-Trade Zone Export Enhancement Act of 2026, which would allow goods produced in Foreign-Trade Zones to be exported duty-free to Mexico and Canada, according to the office of Sen. Scott.
The bill is intended to remove a trade disadvantage that prevents goods produced in a U.S. Foreign-Trade Zone from being exported duty-free to Mexico and Canada under the United States-Mexico-Canada Agreement, according to Scott’s office. Under USMCA, U.S. manufacturers operating within U.S. Foreign-Trade Zones are required to pay a duty to the U.S. government on inputs used in products made domestically that are exported to Canada and Mexico, while Mexico and Canada have implemented loopholes to avoid the requirement, according to Scott’s office.
“South Carolina companies operating in Foreign-Trade Zones make significant contributions to the Palmetto State’s economy,” Scott said. “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.”
U.S. Sen. Katie Britt, R-Ala., is a co-sponsor of the bill. Companion legislation has been introduced in the House by Reps. Lance Goodman, R-Texas, and Vicente Gonzalez, D-Texas, according to Scott’s office.
The bill is supported by BMW Group, AFL, SC Ports and the National Association of Foreign-Trade Zones, according to Scott’s office.
Congress created the U.S. Foreign-Trade Zone program in 1934 to encourage domestic manufacturing and distribution in cases where foreign countries maintain a tariff advantage, according to Scott’s office. In South Carolina, Foreign-Trade Zones employ roughly 28,000 people and handle $5 billion to $10 billion in exports, according to Scott’s office. South Carolina ranks fourth among states in total Foreign-Trade Zone exports and 10th in merchandise received, and the Dorchester County Foreign-Trade Zone ranks first among warehouse/distribution zones in exports, according to the Annual Report of the Foreign-Trade Zones Board for 2024, as cited by Scott’s office.
Nationally, $133 billion of merchandise was exported from U.S. Foreign-Trade Zones in 2024, accounting for nearly 7% of total U.S. goods exports that year, according to Scott’s office.
Source: U.S. Sen. Tim Scott original release.
