Published by M. E. Dey & Co. News, December 8, 2025

For most importers, the past few years have felt like one long balancing act. First came the pandemic shocks. Then the port backlogs, container shortages, geopolitical tensions, and inflation. Just when the world seemed ready for a breather, 2025 arrived with a fresh set of challenges anchored in one central theme: tariffs are back in full force, and they are changing everything.

What once looked like temporary trade measures now appears to be the new normal. A recent Maersk survey found that four out of five supply chain leaders expect the current disruptions to continue for another one to two years. That projection does not simply reflect slow global recovery. It reflects a deeper shift in how products move across borders and how companies think about sourcing. Tariffs are no longer brief interruptions in policy. They are a long-term cost, a strategic risk, and in many cases, the final push that forces companies to rethink their entire supply chain model.

Welcome to what many in the industry are calling the Great Supply Chain Reset.

A Year Defined by Tariff Pressure

The tariff landscape of 2025 has touched almost every sector. Expanded IEEPA duties, ongoing Section 301 actions, and the removal of the de minimis exemption for low-value shipments have raised costs for importers with very little warning. Many companies entered the year expecting some volatility, but few were prepared for the scale of cost increases and the speed at which they arrived.

The strain shows up clearly in economic data. According to recent reporting from Reuters, United States manufacturing contracted for the ninth month in a row in November. Executives cited rising input costs and the ongoing tariff load as major concerns. Higher duties now influence everything from raw materials to finished consumer products, and as a result, companies are making hard decisions about where to produce, how much to import, and how to manage risk in a world where trade rules seem to shift every quarter.

The result is a fundamental reexamination of sourcing. The idea that a company can rely on one country for most of its supply has started to disappear. Tariffs have become the catalyst that breaks long-standing habits.

Companies Are Rebuilding Their Supply Chains From the Ground Up

Across every major industry, businesses are quietly rewriting their sourcing strategy. Some are expanding production to Southeast Asia or India. Others are moving work to Mexico or even bringing parts of their supply chains back to the United States. The goal is not to abandon global sourcing. The goal is to reduce exposure to sudden policy changes and to reduce dependence on a single supplier, a single geography, or a single political environment.

Sectors that operate on thin margins, such as plastics and medical technology, have moved especially quickly. Industry reporting shows companies in these fields accelerating the shift to alternate locations as they try to protect both price stability and long-term business continuity. Each relocation comes with challenges, but the strategic advantage is clear. If one country becomes too expensive or too unpredictable, another location is already in the mix.

The “China plus one” model is no longer a trend. It is becoming the baseline for risk management.

A Wave of Contract Redesign

Alongside supply chain changes, companies are revisiting their contracts. Many are adding tariff escalation language, new pricing structures, and updated force majeure sections to reflect modern trade realities. These clauses help share risk between importers and suppliers and prevent situations where unexpected tariff increases force either party into large financial losses.

Companies are also performing more frequent supply chain audits. They want to know exactly where each component comes from and what fallback options exist. The world has learned that the origin story of a product matters far more than it once seemed. Even a small subcomponent can trigger a tariff or create a compliance issue if it comes from a restricted region.

This contract work is tedious, but it is becoming essential. A business that understands its supply chain on a deeper level is a business that can respond faster when world events shift.

Small Importers Are Facing the Toughest Conditions

While large companies adjust by spreading their supply chains across multiple countries, small and medium-sized importers often have fewer options. The removal of the de minimis exemption has hit these businesses especially hard. Items that once entered duty-free now arrive with full tariff costs attached. For many small retailers, especially those dependent on frequent low-value imports, this change has created real financial strain.

Industry stories from late 2025 describe retailers facing unexpected duty bills during the height of the holiday season. Some were able to adjust prices. Others simply absorbed the cost, knowing the alternative was a potential loss of customers. For smaller importers that compete primarily on price, the margin pressure is becoming unsustainable.

This is one reason why the restructuring of supply chains is not just a global strategy. It is becoming a survival strategy.

A New Pressure Emerges: The AI-Driven Chip Shortage

As companies navigate tariffs, another challenge is building in the background. Demand for advanced memory chips used in artificial intelligence has surged at a pace no one expected. Reuters recently reported that this spike has created a new supply shortage, with ripple effects across industries, from consumer electronics to data center infrastructure and industrial equipment.

This issue is not directly tied to tariffs, but it adds another layer of stress to the global logistics picture. Lead times are lengthening. Prices are rising. Manufacturers are delaying projects as they wait for critical components. Importers now face dual pressure from both geopolitical policy and technological demand.

The supply chain is not being tested on one front. It is being tested on all fronts at once.

Preparing for 2026 and Beyond

Given this environment, importers are not looking for temporary workarounds. They are looking for long-term stability. A few strategies are becoming essential:

• Conduct full landed cost modeling. Importers benefit from running multiple scenarios to understand how duties, freight shifts, and supplier changes affect total cost.
• Diversify suppliers and origins. Even small firms can explore alternative countries or secondary suppliers to prevent single point failure.
• Strengthen supplier agreements. Updated contracts with clear tariff language protect both sides of the partnership.
• Reevaluate inventory strategy. Some importers are building more safety stock, while others are tightening inventory to preserve cash. The right choice depends on product type and volatility.
• Explore duty mitigation tools. Options such as foreign trade zones, duty drawback, first sale valuation, and tariff engineering can help reduce exposure.

These are not short-term ideas. They represent a wider shift in how companies operate in a trade environment that may remain unpredictable for years.

The Competitive Advantage of Resilience

The Great Supply Chain Reset is not defined only by disruption. It is also defined by opportunity. Companies that adapt early, diversify their sourcing, modernize their contracts, and understand their risks may emerge stronger than before. They may also find new partners, new markets, and new cost structures that support long term growth.

Tariffs are reshaping global trade, but they are also forcing businesses to innovate. In a world where uncertainty has become a constant, resilience is no longer a defensive move. It is a competitive advantage.

We will continue to help importers navigate this evolving landscape, from tariff strategy to compliance to supply chain planning. The reset is underway. The smartest companies are using it to build what comes next.

On May 22, 2024, the U.S. Trade Representative (“USTR”) published a Federal Register Notice (“FRN”) regarding proposed modifications to tariffs imposed on Chinese-origin steel under Section 301 of the Trade Act of 1974 (“Section 301”). The FRN provides details on last week’s announcement from the White House where President Biden directed USTR to increase tariffs on $18B of certain Chinese-origin products, listing the 382 HTSUS subheadings and 5 statistical reporting numbers targeted by the proposed tariffs.

The tariffs are scheduled to go into effect on varying timelines starting in 2024 and continuing into 2026. Increases in 2024 will be effective August 1, 2024, and increases in 2025 and 2026 will be effective January 1st of each year. The notice requests public comments on the proposed modifications with a deadline of June 28, 2024.

Proposed Modifications

The proposed modifications will either add new or increase Section 301 tariffs on specific products within the following strategic sectors:

1. Steel and Aluminum
2. Semiconductors
3. Electric Vehicles
4. Batteries and Battery Components and Parts
5. Critical Minerals
6. Solar Cells
7. Ship-to-Shore Cranes
8. Medical Products

Tariff rates for HTS codes in these sectors are increasing to between 25% and 100%. A listing of all impacted HTSUS subheadings and statistical reporting numbers can be found in Annex A of the FRN.

Proposed Exclusions for Certain Machinery

In addition to the proposed modifications to the Section 301 tariffs, the FRN details a new tariff exclusion request process for certain machinery used in domestic manufacturing and classified within prescribed HTSUS subheadings, listed in Annex B of the same FRN. The exclusion process will allow eligible products to be excluded from the Section 301 tariffs through May 31, 2025, if approved.

USTR also published a separate list of 19 temporary exclusions for solar manufacturing equipment, which will be effective through May 31, 2025 (see Annex C).

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[1] On April 9, 2024, I shared a panel discussion on Crucial Compliance Updates: What’s on Your Radar?, a program that was hosted by the Madison International Trade Association (MITA). My presentation explored the intricacies and challenges that global companies now face when trying to maintain compliant operations amidst conflicting U.S. and China laws. At the heart of the issue lies a fundamental question: how can a company comply with both U.S. and China regulations when they directly contradict each other? This challenge is particularly acute because the US and China, the world’s two largest economies, are increasingly enacting laws with overlapping reach but divergent objectives. This legal tug-of-war forces businesses to navigate a labyrinth of regulations that can have severe consequences for their business continuity, reputation, and financial well-being.

The Dueling Sanctions Landscape

Dueling sanctions refer to the tit-for-tat measures enacted by the United States and China against each other in response to various issues ranging from human rights concerns to trade disputes to geopolitical tensions. When one country imposes sanctions on the other, the targeted nation typically retaliates with its own set of sanctions, leading to a cycle of escalation. These sanctions come in various forms, including additional tariffs; asset freezes; import and export control trade restrictions; travel bans; and financial penalties targeting individuals, entities, and even entire sectors.

With regards to United States sanctions regime, these sanctions have been notably expansive, targeting entities and individuals worldwide for activities deemed contrary to U.S. interests. In recent years, the U.S. has escalated sanctions against Chinese companies and officials over issues such as alleged human rights abuses in Xinjiang; national security concerns related to Huawei and other Chinese tech firms; and perceived infringement of Hong Kong’s autonomy.

China on the other hand, and in response to U.S. sanctions, has implemented its own retaliatory sanctions, targeting U.S. individuals, companies, and organizations deemed to have interfered in its internal affairs or threatened its sovereignty. These measures have included visa bans and asset freezes on US individuals critical of China’s policies, and restrictions on US defense contractors involved in the sale of arms to Taiwan.

Implications for Businesses

For businesses with operations or interests in both the U.S. and China, navigating the dueling sanctions landscape is akin to walking a tightrope. These sanctions can have far-reaching consequences, impacting supply chains, trade relations, and investment opportunities. Here are some key implications:

1. Disrupted Supply Chains: Sanctions can disrupt supply chains by limiting access to critical components or materials from sanctioned entities. This can lead to delays, increased costs, and operational challenges for businesses reliant on these inputs.

2. Market Uncertainty: The uncertainty surrounding dueling sanctions creates a volatile business environment, making it difficult for companies to plan and execute long-term strategies. Fluctuations in regulations and trade policies can affect market access and consumer demand, adding another layer of complexity for businesses.

3. Reputational Risks: Businesses may face reputational risks if they are perceived to be on the wrong side of the sanctions debate. Associations with sanctioned entities or allegations of complicity in human rights abuses can tarnish a company’s brand image and erode consumer trust.

Navigating the Challenges

Despite the daunting challenges posed by dueling sanctions, there are steps that businesses can take to mitigate risks and protect themselves:

1. Stay Informed: Keep abreast of developments in US-China relations, including new sanctions announcements and regulatory changes. Understanding the evolving landscape is crucial for anticipating potential impacts on your business operations.

• Enhance Due Diligence: Conduct thorough due diligence on your business partners, suppliers, and customers to identify any potential exposure to sanction risks. Implement robust compliance measures and monitoring mechanisms to detect and address red flags proactively.

3. Diversify Suppliers and Markets: Reduce dependency on single-source suppliers or markets that are vulnerable to sanctions. Diversifying your supply chain and exploring alternative markets can help mitigate risks and ensure business continuity.

4. Engage with Authorities: Maintain open channels of communication with relevant government agencies and regulatory bodies in both the US and China. Seek guidance on compliance obligations and proactively address any concerns or queries to ensure alignment with applicable sanctions regulations.

Conclusory Remarks

The future of US-China sanctions remains uncertain. Businesses should be prepared for a prolonged period of tension and potential for additional sanctions. As dueling sanctions will continue to shape the US-China relationship, businesses must adapt to the evolving landscape and proactively manage sanctions risks.

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[1] Ngosong Fonkem is an International Trade attorney at Harris-Sliwoski LLP.

On March 6, 2024 Senators Bill Cassidy (LA), Michael Bennet (CO), Adriano Espaillat (NY), and Maria Elvira Salazar (FL) introduced the Americas Trade and Investment Act with the endorsement and co-sponsorship from Congressman Mike Gallagher, Wisconsin Representative and the Chairman of the House Select China Committee Chairman. The proposed bipartisan legislation aims to minimize U.S. dependence on Chinese manufacturing specifically through tax incentives, loans, and grants for businesses looking to re-shore and near-shore their manufacturing and distribution activities.

The proposed legislation is based on five pillars:

(1) The Americas Partnership;

(2) E-Governance;

(3) Trade;

(4) Investment; and

(5) People-to-People.

Each pillar provides opportunity to enact change in areas such as domestic circular businesses and textile manufacturing; reshoring and nearshoring efforts by U.S. businesses; reducing exposure to forced labor in Xinjiang; and closing the glaring de minimis loophole that currently impacts the Foreign Trade Zone program.

This landmark bill will be referred to the Senate Finance Committee following its public announcement. Though it faces a long legislative road ahead before becoming law, MITA, along with the rest of the international trade community, will be closely monitoring its progress and the possible impacts it could bring to U.S. businesses.

Find more information on this proposed legislation here:

https://salazar.house.gov/media/press-releases/landmark-americas-act-introduced-salazar-espaillat-cassidy-and-bennetchrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.cassidy.senate.gov/wp-content/uploads/media/doc/Americas%20Act%201.6.2023.pdf

The United States and China, two of the largest economies in the world, continue to compete in both national security and economic output. The impacts of this rivalry can be seen across industries, including a focus on advanced technologies and renewable energies. While each nation seeks complete economic independence and national autonomy from the other, the mutually reliant markets established make a total separation more difficult than desired.

The most prominent world market continues to be the field of technology, as it is not only one of the most significant economic drivers but also plays a crucial role in the everchanging landscape of national security. Within the technology industry, the U.S. and China have placed a focus on controlling the development of high-performance semiconductors and the manufacturing equipment necessary to produce these chips. Many technology and manufacturing companies in China and the U.S. have established business operations that are reliant on the ability to ship goods and equipment between both nations. In light of recent regulations by the U.S. Bureau of Industry and Security (“BIS”), Kearney’s 2023 Reshoring Index indicated that over 95% of U.S. CEOs plan to reshore their production from China, including companies such as Google, Intel, Amazon, and Microsoft.1 A key example comes from Massachusetts-based semiconductor testing equipment company, Teradyne, who pulled about $1 billion worth of manufacturing equipment out of China following the October, 2022 restrictions.[1]

For most of the semiconductor and advanced technology companies, the move out of China was not much of a choice. The new U.S. chip regulations have severely limited the capacity and type of semiconductors or manufacturing equipment that is allowed to be shipped into China.[2] To counterbalance the impacts of the new controls, some companies have attempted to produce goods in China that would only be sold to the domestic Chinese market. For example, Nvidia has started accepting pre-orders for a new China-specific artificial intelligence (“AI”) chip, the H20, hoping to keep stride with Chinese Technology leader, Huawei.[3]  Prior to the recent U.S. regulations, Nvidia had more than a 90% share of China’s AI chip market, but now navigating the restrictions will require their best effort to even compete. It has become nearly impossible to compete with the Chinese companies in China, as they receive subsidies on electricity, raw materials, land and are eligible for contracts from the Chinese government. Even if companies are not bringing production back into the United States, many are moving their manufacturing hubs out of China and into allied nations such as India, Vietnam, or Thailand.

The U.S. is also heavily reliant on China for key components of the solar and EV product market. According to a report by the International Energy Agency (“IEA”), China is responsible for 80% of solar cells and assembled panels. In the EV market alone, China accounts for 60% of global battery-grade lithium produced.[4] If the tensions between China and the U.S. continue to develop as they have, both U.S. users and manufacturers of clean energy products, like solar or EV, are potentially going to require new suppliers or adjusted operational strategies.

The trade tensions between the U.S. and China do not only stem from economic concerns, but equally from perceived threats to national security. The growing rivalry has placed new microscope on any U.S. company who has ties to China or Chinese business partners. One of the largest examples of this comes from a U.S. legacy automaker, Ford Motor Company. Ford is currently under an ongoing investigation due to their partnership with China-based Electronic Vehicle (“EV”) battery maker, Contemporary Amperex Technology Co. Limited (“CATL”) to build a new Michigan Factory.5 Wisconsin Congressman, and Chairman of the House Select Committee on the Chinese Communist Party, Mike Gallagher, has noted that Ford planned to use technology and software from four Chinese companies who also supply similar technology to the Chinese military and North Korea. On the matter, Chairman Gallagher said, “It is indefensible for Ford to use the same cloud integration and data provider that is linked to North Korean Ministry of Foreign Affairs sanctions evasion activity.”5  

The repercussions of these actions by both the U.S. and China  can be felt across all markets as the international supply chain landscape is constantly changing. China saw a drastic decrease in export activity to the U.S. across all industries in 2023. As both countries continue their attempts to dominate particular industries and disentangle themselves from each other, companies are left to regularly adjust their own strategies and supply chains.

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The Madison International Trade Association is proud to welcome Chrissy Blanchard and Chris Rosborough to its board of directors. The newly elected members will serve a three-year term on the MITA Board of Directors starting January 1, 2024.

Chrissy Blanchard, a Certified Global Business Professional through NASBITE International, manages all aspects of US import/export processes for RBP Chemical Technology, Inc. Her role includes managing international sales support, order administration, documentation/recordkeeping, logistics, and export compliance. Chris Rosborough, a Senior Director for Tax Services at RSM US LLP, assists clients with multi-state and international operations in the manufacturing, wholesale distribution, and real estate industries. He has extensive experience in corporate reorganizations, credits and incentives, cost segregation, and all areas of state and local taxation.

MITA also recognizes Dan Brink, Attorney at Dewitt LLP,  as a re-elected Board Member for the new, three-year term starting January 1, 2024.

Continuing members on the board of directors also include:

• Poonam Arora of Arnold Magnetics
• Rome Rauter of Wisconsin Economic Development Corporation
• Phil Gantz of Wells Fargo Bank
• Germaine Krystowiak of Swarming Technology
• Aleda Bourassa of International Customs Services Inc.
• Alison Jacobs of FTI Consulting, Inc.
• Carla Kutsche of STAR7
• Maureen Muldoon, Independent

MITA also recognizes two departing board members, Paul Jarzombek of LR International and Maria Cartier of Port of Milwaukee, who served on MITA’s board for several years and have been instrumental in our recent membership, marketing, and programming initiatives!

Trade Dispute Panel Rules Against U.S. Claim of Unfair Canadian Dairy Tariffs Rate Quotas

On Friday, November 24th , a dispute settlement panel created under the United States-Mexico-Canada Agreement (“USMCA”) released a final report approving Canada’s most recent dairy Tariff-Rate Quota (“TRQs”) requirements. This finding that Canadian TRQs do not breach USMCA obligations, “flies in the face of the agreement our country made with Canada and puts our Made in Wisconsin dairy products at a disadvantage”, as stated by U.S. Senator from Wisconsin Tammy Baldwin. A full copy of the panel’s final report can be found here.

In 2022, the United States gained a favorable opinion from the same panel created under the USMCA, finding that Canada was breaching its commitments under the agreement by reserving most of the in- quota quantity in its dairy TRQs for the exclusive use of Canadian processors. Following this panel decision, Canada modified its TRQ requirements to comply with their USMCA commitment. The updated TRQ policy includes measures to use a market-share approach for determining TRQ allocations, and prevents retailers, food service operators, and other listed types of importers from utilizing TRQ allocations. The United States, via U.S. Trade Representative and Ambassador Katherine Tai, similarly challenged the updated Canadian TRQs, claiming that they still resulted in an undue restraint on U.S. dairy farmers exporting to the Canadian market.

While two of the three panelists concluded that Canada’s updated TRQs do not impose an undue restraint or violate any commitments under the USMCA, one panelist did agree with the claims by Ambassador Tai. The panelist stated that the narrow scope of applicants allowed under Canada’s TRQs significantly limits a large number of other Canadian importers who would be eager to bring U.S. dairy products to Canada. The dissenting panelist specified that Canada breached its USMCA commitment to make its dairy TRQs available to all applicants active in the Canadian food or agriculture sector.

Ruling that Canada’s TRQ requirements for applicants do not violate their commitment under the USMCA, poses a threat to both the U.S. Dairy Farmers and the Canadian Dairy Importers. The United States is a global leader in both dairy production and quality, and this ruling fights against an international dairy industry that provides for 150,000 jobs and $45.6 billion in state revenue in Wisconsin alone. Moreover, it prevents Canadian retailers and food service operators from accessing a steady and affordable supply of so desired quality U.S. dairy products. Senator Baldwin further stated, “This decision should have resulted in necessary improvements for market access for American dairy products in Canada, but instead sets a disturbing precedent that weakens the ability to use USMCA to push back against trade violations moving forward.”

Following the unfavorable outcome of this most recent USMCA panel, Ambassador Tai and U.S. Secretary of Agriculture Tom Vilsack made the comments below, reaffirming their staunch commitment to protecting the benefits that U.S. Farmers, processors, and exporters were promised under the USMCA.

U.S. Secretary of Agriculture Tom Vilsack: “The United States won the first USMCA case on Canada’s dairy TRQ allocation system with the ultimate goal of securing fair market access for U.S. dairy farmers, workers, processors, and exporters. Although we are disappointed in the outcome of this second case, we brought this case to refine and expand upon our win in the first case. We will continue to voice deep concerns about Canada’s system. We remain focused on securing the market access we believe Canada committed to under the USMCA and we will continue exploring all avenues available to achieve that goal.”

U.S. Ambassador Katherine Tai: “Despite the conclusions of this report, the United States continues to have serious concerns about how Canada is implementing the dairy market access commitments it made in the Agreement.  While the United States won a previous USMCA dispute on Canada’s dairy TRQ allocation measures, Canada’s revised policies have still not fixed the problem for U.S dairy farmers.  We will continue to work to address this issue with Canada, and we will not hesitate to use all available tools to enforce our trade agreements and ensure that U.S. workers, farmers, manufacturers, and exporters receive the full benefits of the USMCA.”

Baldwin Blasts Decision to Allow Canada’s Unfair Dairy Trade Practices to Stand, Hurting Wisconsin Farmers

USMCA Panel Releases Canada Dairy Report; Biden-Harris Administration Will Continue Seeking Full USMCA Benefits for U.S. Dairy

What are they saying? USMCA Dairy Ruling

With the new fiscal year starting on October 1st, U.S. Customs and Border Protection (“Customs”) will begin to notify U.S. importers of their selection for and required participation in various audit and assessment programs. As FTI Consulting’s (“FTI”), Alison Jacobs, Courtney Stiers, and Matt Williams discussed, Customs has been increasingly focused on enforcement recently, and importers can probably expect this trend to continue into the next fiscal year.

MITA kicked off the 2023-2024 program year on September 19^th by partnering with FTI Consulting to host a webinar focused on CBP audits and assessment programs. The presentation included a discussion on how to engage with Customs during an audit or assessment, how to provide information efficiently and carefully to Customs, and how to make sure your compliance programs and internal controls are prepared now for the possibility of an audit or assessment in the future. Relying on their own experience in developing compliance programs and guiding their clients through Customs audits, the speakers were able to share a valuable perspective on what Customs is looking for and where importers regularly make small mistakes, such as missing deadlines for questionnaire responses or providing too much information to Customs. These small mistakes can have big impacts.

As FTI mentioned throughout their presentation, “you don’t have to get ready if you stay ready.” Importers who develop strong compliance programs, perform their own audits of these programs, and stay up to date on recent regulatory changes and updates will be better prepared if selected for a Customs audit.

MITA members not only get access to valuable programs like these throughout the year, but the opportunity to network with other importers, brokers, and service providers within the international trade industry in Wisconsin. What better way to stay up to date on new trends, regulatory changes, and insights in international  trade than by engaging with a community of other trade professionals? Sign up today for a MITA membership and don’t miss our next event on “Mastering the Current Global Supply Chain Landscape” on October 10^th  at the Fluno Center in Madison, WI.

Register Here: https://www.mitatrade.org/event_item/mastering-the-current-global-supply-chain-landscape/

Check out FTI Consulting services here: https://www.fticonsulting.com/services/investigations-and-monitorships/export-controls-sanctions-trade

For the first time since 1988, the US Trade Representative (“USTR”) requested that the US International Trade Commission (“USITC”) evaluate the foreign Trade zone (“FTZ”) program, specifically evaluating the program’s impact on employment and competitiveness of goods produced in FTZs.[1] Thus, the USITC instituted the “Foreign Trade Zones (FTZs): Effects of FTZ Policies and Practices on U.S. Firms Operating in U.S. FTZs and Under Similar Programs in Canada and Mexico” investigation.

Following a review of questionnaire responses from FTZ Operators and other data collected about US FTZ use, the USITC released their final report on May 15, 2023. This extensive report includes the following highlights:

1. U.S. FTZ Operators regularly see increased cost competitiveness. Firms utilizing the FTZ program, specifically for manufacturing activity, experienced duty cost savings of $1.2 billion in 2021. These savings are primarily achieved through duty deferral on shipments that make customs entry in the United States and duty exemption on direct export shipments.  

• The FTZ Program drives U.S. employment and investment. This study found that FTZ activity creates opportunities for employment and investment beyond just FTZ operators. For example, the USITC found a trend of “supplier firms cluster[ing] around [FTZ] facilities.” Thus, regions with FTZ activity generally see additional employment and development.

• FTZ Operators are regularly missing an opportunity for duty savings on “indirect export shipments”. This investigation reported about 77 percent of export shipments being “indirectly exported,” meaning the shipment was previously entered into U.S. commerce before being exported. This is a significant opportunity for duty savings by FTZ Operators that is not being utilized.

• FTZ Operators continue to be disadvantaged by U.S. De Minimis provisions. U.S. FTZ provisions require FTZ Operators of warehousing and distribution zones to pay duty on shipments valued at less than $800 even though those shipments would normally be below the de minimis threshold and duty free for U.S. Importers. These provisions regularly push companies to set up warehouse or distribution facilities in Canada or Mexico rather than keeping that activity in the U.S.

Overall, this report highlights the many economic benefits of the FTZ program, but it also highlights the work still to be done in leveling playing field between U.S. FTZ operators and their foreign competitors. This is only a report of facts and findings, but it may be crucial to future policy development for the FTZ program. 

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[1] This factfinding investigation by the USITC is conducted under section 332(g) of the Tariff Act of 1930.

I’d like to take this opportunity to introduce myself as the recently elected Madison International Trade Association (MITA) President for 2023 and to welcome you to another year of informing, networking and connecting with MITA.

I, along with the Executive Team of Dan Brink (Vice President), Phil Gantz (Treasurer) and Maureen Muldoon (Secretary), as well as the entire Board of Directors, are excited to serve you this year.  Board of Director elections were held in December. We are pleased to welcome four new directors to the Board. Below is a list of the 2023 Board Directors. Their contact information can be found on the MITA website.

• Poonam Arora, Arnold Magnetics
• Aleda Bourassa, International Customs Services, Inc. (ICS)
• Dan Brink, Dewitt LLP
• Maria Magyar Cartier, Port Milwaukee
• Phil Gantz, Wells Fargo
• Nicole Hess, M.E. Dey
• Alison Jacobs, FTI Consulting
• Paul Jarzombek, LR International
• Germaine Krystowiak, Swarming Technology
• Carla Kutsche, STAR7
• Maureen Muldoon, Trek Bicycle Inc.(retired)
• Jenny Patzlaff, UWEBC
• Rome Rauter, WEDC

Your Board is hard at work planning programming for this year and is excited that we are again hosting events in person at the Fluno Center in Madison, Wisconsin.  I encourage all of you to take full advantage of our luncheons which offer quality programming, delicious food and in-person networking with significant benefits which cannot be realized in a webinar. 

Our January and February in person events were well attended and we hope to build on that attendance at future events.  Speaking of future events, our March Program, Ukraine – Post Conflict Economic Development taking place March 14, 2023, will offer a timely presentation on the latest economic development opportunities in Ukraine.  To learn more and register, visit our website.

Thank you for your continued support and participation in MITA. I would love to hear from you with feedback, questions and suggestions.  My and the Board’s goal is to bring maximum value to you and your organizations as you navigate the field of international trade.  I look forward to seeing you at an upcoming event!

Sincerely,

Carla Kutsche

President, Madison International Trade Association