The more I think about this, the more I'm convinced it's bad reporting, or misquoting. As a Canadian that exports, I've been to presentations out on by CBP and cross-border warehousing services that covered FTZ. There's no way something this basic gets past them.
It's not bad reporting, it's true. This is how "rules of origin" work in general.
For an example relevant to Canada pead e.g. what the CETA (EU-Canada) deal has to say about "rules of origin"[1]. For the gory details start reading at page 549 of the full text[2].
Here's an article about how Canadian car manufacturing gets a rebate on raw materials used for exported vehicles[3].
None of this is unusual, having this happen within a FTZ is just a way to speed up the paperwork part of it. You can setup a process where you don't first have to pay tariffs and then seek a rebate, instead you don't pay the tariffs in the first place and the government makes sure the goods are for export.
Some of those good then make their way back into the country, at which point you might pay tariffs on them.
The more I think about this, the more I'm convinced it's bad reporting, or misquoting. As a Canadian that exports, I've been to presentations out on by CBP and cross-border warehousing services that covered FTZ. There's no way something this basic gets past them.