In a significant development for U.S. importers and exporters, the newly announced reciprocal tariffs from the Trump administration have been confirmed as duty drawback eligible. This presents a major opportunity for companies to recover tariffs paid on imported goods when those goods, or similar articles, are subsequently exported or destroyed.
What Are Reciprocal Tariffs?
Reciprocal tariffs are part of the administration’s push to level the playing field in global trade. The policy imposes matching duties on imported goods from countries that levy higher tariffs on U.S. exports. While this move is designed to incentivize fairer trade agreements, it also increases the cost of certain imported goods in the short term.
Drawback Eligibility: A Relief for Affected Businesses
The good news? These new reciprocal tariffs are eligible for duty drawback under 19 U.S.C. §1313. That means companies can file for refunds of the tariffs paid, provided they meet the program requirements. It’s also important to note that any regular rates of duty, Section 301 tariffs, MPF, and HMF are all drawback eligible.
How Duty Drawback Works
Duty drawback allows importers to reclaim up to 99% of duties, taxes, and fees paid on goods that are later exported, destroyed, or used to produce exported articles. There are several types of drawback programs, but for reciprocal tariffs, the most relevant categories include:
- Unused Merchandise Direct Identification 1313(j)(1)
- Unused Merchandise Substitution 1313(j)(2)
- Manufacturing Direct Identification 1313(a)
- Manufacturing Substitution 1313(b)
- Petrochemical Drawback 1313(p)
Key Steps to Take Now
If your business has been affected by these new tariffs, here’s how you can leverage the drawback opportunity:
- Conduct a Tariff Impact Analysis
Identify which of your imported products are subject to reciprocal tariffs. - Get a Complimentary Drawback Assessment
Alliance will conduct a complimentary duty drawback assessment help identify historical duty drawback opportunity, up to 5 years from the date of importation, and strategize your future program. - Partner with a Proven Drawback Specialist
With complex data, documentation and compliance requirements, Alliance will ensure your claims are maximized, submitted and compliantly supported with Customs and Border Protection.
Act Quickly
Time is money, especially with tariffs. The typical upstart time for a new duty drawback program, pending application approval with Customs and Border Protection, is 4-6 months. The sooner you establish a compliant drawback program, the sooner you can start recovering cash flow.
Questions about duty drawback?
Talk with a licensed drawback specialist about your imports, exports, and refund potential.
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