Which State Has the Most FTZs in the U.SA?

FTZ News: Texas accounts for 35 of the roughly 260 foreign-trade zones approved across the United States, according to the most recent public directories of the Foreign-Trade Zones Board. Florida is a distant second with 19, followed by California with 17 and New York with 14. The concentration is large enough that it raises a straightforward question: why does one state have nearly twice as many zones as the next?

The program itself is old. Congress created foreign-trade zones in 1934, in the aftermath of the Smoot-Hawley tariffs, to let companies bring goods into the country, store or process them, and postpone customs duties. For decades the zones remained few and mostly tied to seaports. Manufacturing was initially restricted and only later permitted. Growth accelerated in the 1970s and 1980s as companies sought relief from duty differentials between imported components and finished goods.

Texas’s early participation followed the same pattern but was shaped by its border. Zone 12 in McAllen, approved in 1970, was among the first established at a land crossing rather than a deep-water port. Subsequent zones appeared in Houston, Laredo, El Paso, Brownsville and Corpus Christi. Local sponsors—usually port authorities, cities or economic-development groups—applied when companies demonstrated a practical need. The Foreign-Trade Zones Board approved the applications; it did not set a target for any state.

Three features of the Texas economy help explain the higher number. The state maintains multiple high-volume land ports of entry along the Mexican border; Laredo alone handles a large share of northbound truck traffic. It also operates several major Gulf Coast seaports, led by Houston. Finally, it has a heavy concentration of refining and petrochemical plants. In those industries, intermediate materials often carry higher duty rates than the finished products they become, so companies have a clear incentive to use the inverted-tariff and duty-deferral features of a zone. Texas has also ranked as the leading U.S. exporting state for years, which supports a dense network of roads, rail lines and airports that make multi-site zone arrangements workable.

The same logic appears in reverse elsewhere. Eight states—Delaware, Hawaii, New Hampshire, Rhode Island, South Dakota, Utah, Vermont and Wyoming—each have only one zone. None has zero. States with lighter international trade volumes or fewer large ports simply generate fewer applications that meet the board’s “convenience of commerce” test.

Recent tariff volatility has increased interest in the program nationwide. Texas, however, already had the underlying trade flows. Its higher count of zones largely tracks the volume of goods that move through its border crossings and ports, and the industries that process them, rather than any separate effort to accumulate designations. Whether that count continues to grow will depend on how much additional duty-sensitive activity locates in the state, not on the number of zones already on the books./.