Foxconn trade zone status approved, lowering import costs

Designation initially applies to leased facility

A subsidiary of Foxconn Technology Group has been approved for foreign-trade zone status, allowing the company to delay or avoid duty costs on certain imported goods at its leased Mount Pleasant facility.

Attendees visit the Foxconn lounge at the MMAC all-member meeting

The Foreign Trade Zone Board notified AFE Inc. in late March that its application had been approved. AFE is the subsidiary responsible for the assembly televisions and displays in Wisconsin, according to state records. The company, through the Port of Milwaukee, sought approval for the designation in December.

The FTZ designation exempts Foxconn from customs duty payments on components used in products that are eventually exported.

The company would be able to choose the duty rate that applies to the final product on components for domestic distribution. Those products could include whiteboard monitors, displays and televisions. Duties on imported production equipment could also be deferred or reduced.

The components that would be included in the designation range from printed wire boards, LCD modules, power supplies and films used for screens to packaging supplies, AAA batteries, screws and plastic parts for TVs. Duties on those components range from zero to 6.2 percent.

Initially the designation will apply to a facility Foxconn is leasing at 13315 Globe Drive, but Jazmine Jurkiewicz, Port Milwaukee trade development representative and administrator of Foreign-Trade Zone #41, told BizTimes in December the company could apply for additional sites in the future.

Foxconn’s plans call for the company to ramp up the assembly of televisions and displays in the state while it completes construction of its LCD fabrication facility. The company told state officials it expects to generate $3.33 billion in revenue, primarily from assembly operations, through the end of 2020.

Hiring for those assembly operations is a key part of the company earning its tax credits in the first few years of a 15-year contract with the state. Foxconn needs to have 1,040 employees to earn up to $9.5 million in tax credits available this year.

A subsidiary of Foxconn Technology Group has been approved for foreign-trade zone status, allowing the company to delay or avoid duty costs on certain imported goods at its leased Mount Pleasant facility.

Attendees visit the Foxconn lounge at the MMAC all-member meeting

The Foreign Trade Zone Board notified AFE Inc. in late March that its application had been approved. AFE is the subsidiary responsible for the assembly televisions and displays in Wisconsin, according to state records. The company, through the Port of Milwaukee, sought approval for the designation in December.

The FTZ designation exempts Foxconn from customs duty payments on components used in products that are eventually exported.

The company would be able to choose the duty rate that applies to the final product on components for domestic distribution. Those products could include whiteboard monitors, displays and televisions. Duties on imported production equipment could also be deferred or reduced.

The components that would be included in the designation range from printed wire boards, LCD modules, power supplies and films used for screens to packaging supplies, AAA batteries, screws and plastic parts for TVs. Duties on those components range from zero to 6.2 percent.

Initially the designation will apply to a facility Foxconn is leasing at 13315 Globe Drive, but Jazmine Jurkiewicz, Port Milwaukee trade development representative and administrator of Foreign-Trade Zone #41, told BizTimes in December the company could apply for additional sites in the future.

Foxconn’s plans call for the company to ramp up the assembly of televisions and displays in the state while it completes construction of its LCD fabrication facility. The company told state officials it expects to generate $3.33 billion in revenue, primarily from assembly operations, through the end of 2020.

Hiring for those assembly operations is a key part of the company earning its tax credits in the first few years of a 15-year contract with the state. Foxconn needs to have 1,040 employees to earn up to $9.5 million in tax credits available this year.

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