The United States has entered a new phase in the USMCA review process. Following the July 1 joint review, the United States did not agree to renew the agreement in its current form. Importantly, USMCA remains in force, but the agreement now moves into a period of annual reviews that could continue through 2036 unless the three countries reach agreement on an extension sooner.

For businesses that depend on North American trade, that means uncertainty is no longer a future concern; it is part of the planning environment today. As NAFTZ recently noted in press coverage, non-renewal does not end USMCA, but it does create “increased uncertainty” and “renewal pressure” as companies evaluate supply chains, investment decisions, and long-term competitiveness across the region.

For U.S. FTZ manufacturers, this moment underscores why NAFTZ’s legislative work remains so important. The U.S. FTZ community has long supported policies that help American manufacturers compete from U.S. soil. Yet under USMCA, U.S. manufacturers operating in U.S. FTZs can still be required to pay duties on imported inputs used in products made domestically by American workers and then exported to Canada or Mexico. Canada and Mexico have implemented special duty regimes to address this issue for their manufacturers, leaving U.S. FTZ manufacturers at a competitive disadvantage when serving the North American market.

NAFTZ has been working with congressional champions on a narrow, practical legislative fix. H.R. 6792, the Foreign-Trade Zone Export Enhancement Act, was introduced in the House in December and is led by Representatives Lance Gooden, Henry Cuellar, and Vicente Gonzalez, with additional bipartisan cosponsors. The bill would eliminate the export penalty imposed on U.S. FTZ manufacturers exporting to Canada and Mexico by allowing penalty-free export of U.S. FTZ-made products to those markets.

That effort has now gained important momentum in the Senate. Last month, Senators Tim Scott and Katie Britt introduced S. 4793, the Senate companion to H.R. 6792. The Senate bill mirrors the same core objective: creating a narrowly crafted customs provision that helps U.S. FTZ manufacturers compete more fairly when selling into Canada and Mexico.

This is exactly the type of targeted, pro-manufacturing policy Congress should consider as USMCA enters annual review. The issue is not whether U.S. FTZ manufacturers support North American trade. They do. The issue is whether American workers and facilities should face costs that their competitors in Canada and Mexico have already found ways to avoid. Correcting this imbalance would support U.S. manufacturing, strengthen supply chains, encourage exports, and help keep production and investment in communities across the United States.

NAFTZ members have a critical role to play. Lawmakers need to hear how this issue affects real facilities, real investment decisions, and real American jobs. We are especially seeking member stories that explain how H.R. 6792 and S. 4793 could help your company remain competitive when exporting from a U.S. FTZ to Canada and Mexico. The most helpful examples are specific: what you make, where your U.S. FTZ operation is located, how many workers or suppliers may be affected, how the current rule changes your cost position, and how the legislative fix would support continued U.S.-based production.

As the annual USMCA review process moves forward, NAFTZ will continue to advocate for a durable solution that strengthens the U.S. FTZ program and supports American competitiveness. Member engagement will be essential to that effort. Please contact Melissa Irmen, Director of Advocacy for NAFTZ, at mirmen@naftz.org to share your company’s story, discuss how this issue affects your U.S. FTZ operation, or learn how you can support outreach to your members of Congress.