By 2030, the United States may face a shortfall of 2.1 million manufacturing workers, a gap threatening everything from production capacity to national supply-chain resilience. This leaves U.S. companies and policymakers asking one key question: “How can the United States grow high-value production and distribution jobs at home?” The answer lies not only in on-shoring or near-shoring, but also in leveraging existing policy tools that align with today’s workforce and labor realities.
The U.S. Foreign-Trade Zones (FTZ) program is one of those tools. Long viewed principally through the prism of trade, tariffs and duty relief, its deeper role in sustaining and creating U.S. jobs is now coming into sharper focus, especially as supply chain resilience, workforce development and industrial reinvestment move to the top of the United States’ political agenda.
Supply chain realignment: The labor dimension
Today’s supply chain recalibration is not simply about geography – it’s about talent and workforce competitiveness. Manufacturing job openings remain elevated; companies are increasingly struggling to shift workers into higher-value roles (e.g., advanced manufacturing, logistics automation, etc.). Meanwhile, retention and recruitment of skilled workers remain strategic priorities for operations leaders.
In that context, one of the most effective ways to anchor jobs in the United States is to ensure that production and warehouse/distribution operations are embedded here, but optimized for cost, flexibility and trade competitiveness. That is the sweet spot for the U.S. FTZ program, which offers official FTZ “designation” for private entities and is uniquely administered at the local level by economic development officials and guided by federal oversight.
FTZs: A vehicle to preserve U.S. jobs
According to the 2023 Annual Report to Congress from the ForeignTrade Zones Board, U.S. FTZ operations supported over 550,000 U.S. jobs and involved shipments of nearly $949 billion. In Phoenix, Ariz., alone (FTZ No. 75), more than $22 billion in goods were processed in 2023, with more than 69,000 employees working in the activated space. Among those jobs are both production and distribution roles, the kinds of positions most vulnerable to global displacement and automation pressure.
Moreover, the data shows that domestic-status merchandise (i.e., U.S.-origin or duty-paid inputs) made up about 68% of zone shipments, underscoring that U.S. FTZ operations are not simply foreign-assembly islands, but rather integrated U.S. operations leveraging domestic inputs alongside global supply. For workforce leaders, this means U.S. FTZ operations often require U.S. talent – machinists, logistics coordinators, automated system operators and distribution-center staff – who are performing work of increasing value.
U.S. FTZs and labor priorities
For firms that may otherwise relocate offshore for cost-advantage, U.S. FTZ incentives, including duty deferral, help offset trade-related costs (duties, warehousing, time/cycle-costs) enabling them to keep jobs in the United States. The result: high-value operations remain accessible to American workers. So, while cost is only part of the decision calculus, when labor is local and capable, the anchor of an FTZ-enabled U.S. site becomes far more viable.
Furthermore, as distribution centers become more automated and production shifts toward higher-value manufacturing (electronics, pharmaceuticals, precision machinery), the nature of the workforce is shifting as well. U.S. FTZ operations are now increasingly found in sectors such as pharmaceuticals, automotive and machinery/equipment, each of which demands skilled labor, maintenance and logistics in the United States. This means that the jobs supported by U.S. FTZs are not purely labor-intensive commodity-assembly; they are moving up the value chain.
In addition, many supply chain disruptions in recent years have stemmed from logistics and distribution fragility – ports, long-haul transit and inventory bottlenecks. However, U.S. FTZs are often co-located with major import/export gateways; and so, U.S.-based manufacturing and distribution inside a U.S. FTZ helps create clusters of employment, from fork-lift operators and warehouse technicians to logistics analysts and supply-chain managers, as well as emerging automation and maintenance roles. These regional employment ecosystems can support robust labor pipelines and reduce single-point failure risks.
An era of realignment
Simply put, amid today’s ongoing economic shifts, the U.S. FTZ program represents a mature, proven policy tool that many companies underutilize. It offers a way to keep high-value U.S. jobs onshore and embed operations in American communities, even as supply chains become more complex and global cost pressures intensify.
And once more: the labor challenge facing supply chain and operational leaders is not going away. Talent scarcity, automation transition, retention pressures and regional workforce competition will all intensify. To address that, firms must think holistically, linking site location and operational cost with workforce strategy, logistics resilience and public-policy alignment.
That’s where the U.S. FTZ program comes into play. By leveraging these designated sites, companies can align their workforce strategy with a cost-competitiveness framework that helps keep jobs here while expanding operational flexibility.
At the same time, policymakers and regional economic development stakeholders should continue to raise awareness of U.S. FTZ opportunities, particularly in regions looking to attract or retain advanced manufacturing or distribution employment.
So, as you shape your workforce strategy for 2025 and beyond, the question shouldn’t just be where to operate, but instead how to do so in a way that strengthens U.S. employment, supports long-term labor planning and enhances cost competitiveness.
The U.S. FTZ program is a key part of that equation.
