Lutron Electronics Co., Inc. and Thermo Fisher Scientific recently received designations for the Lehigh Valley’s Foreign Trade Zone (FTZ #272), a U.S. customs program that allows businesses to defer, reduce, or eliminate duties and other tariffs. 

Company officials said the FTZ will support their operations in the Lehigh Valley, improving supply chains and helping them better serve customers in the U.S. and around the world.

The new designations come as more companies are exploring Foreign Trade Zones to manage costs and adapt to changing global trade conditions.

“The growing interest in the Foreign Trade Zone reflects how companies are looking for smarter, more efficient ways to operate. The FTZ helps them reduce costs, streamline logistics, and reinforces the Lehigh Valley’s role as a hub for global trade,”  said Jaime Whalen, Executive Vice President and Chief of Staff at Lehigh Valley Economic Development Corporation (LVEDC), which is the grantee for the region’s FTZ.

A Foreign Trade Zone is a physical location within a United States customs territory, where merchandise receives the same treatment as if it were outside the commerce of the United States. Merchandise, while located in the FTZ, is not subject to customs duties, tariffs, and taxes. U.S. manufacturers can import foreign-sourced parts or materials into the FTZ without being responsible for paying duties on them.

While in an FTZ, merchandise may be assembled, exhibited, cleaned, manipulated, manufactured, mixed, processed, relabeled, repackaged, repaired, salvaged, sampled, stored, tested, displayed, and destroyed. If the merchandise never enters the U.S. commerce, then no U.S. duties or taxes are ever paid on those items.

Distributors also benefit because the FTZ allows for direct delivery from ports into the zone, saving time, money, and customs processing fees. Merchandise can also be moved from one FTZ to another without being subject to customs duty via a process called Zone-to-Zone Transfer.

Lehigh Valley’s FTZ can encompass 2,000 acres in Lehigh and Northampton counties when fully activated. It is not site specific and can be applied to any location within the counties.

In 2024, the most recent data available, the FTZ in Lehigh Valley hosted companies that sent a combined $3.8 billion in merchandise to U.S. and foreign markets and other FTZs.

Other companies participating in the FTZ are: BMW of North America, LLC; Geodis Logistics, LLC; Grundfos Pumps Manufacturing Corp.; Piramal Critical Care; Primark; and Sharp Packaging Services, LLC.

Lutron and Thermo Fisher said the FTZ will support their work in the Lehigh Valley.

“This investment enabled Lutron to maintain jobs in the Valley and for our main distribution center to continue to provide excellent service to international customers as well as domestic customers. Investments like this help to secure the Lehigh Valley as our hub for global distribution activity,” said Mark Tervalon, Chief Operating Officer at Lutron.

“Thermo Fisher has expanded our Foreign Trade Zone capabilities to Allentown, PA to help clients accelerate clinical timelines through seamless cross-region material movement with flexible, tailored supply chain solutions,” the company said.

As a grantee for the Lehigh Valley’s FTZ program, LVEDC is responsible for managing the zone and sponsoring applications from companies that want to establish an FTZ for their business.

To learn more, contact Nadya Rachid, LVEDC Program Manager, at nrachid@lehighvalley.org.