With the Trump Administration’s focus on import tariffs, businesses are once again feeling the pressure of rising trade costs. As these levies increase, many companies are revisiting duty drawback as a tariff mitigation strategy, especially with the April 4 Customs and Border Protection (CBP) brief confirming that drawback is available for the new across-the-board 10% and reciprocal tariffs of 11% to 50%.
Duty drawback is a refund of tariff-imposed import duties, taxes, and fees paid on imported goods that are subsequently exported or destroyed. — and for businesses looking to protect their bottom line, it can be a valuable tool.
Given the growing complexity of today’s trade environment, we want to share our latest interpretation of which tariffs are currently eligible for drawback — and which ones are not. Here’s what we know so far.
Drawback-Eligible Tariffs
- 10% Universal Tariff, Effective April 5, 2025
- Country-Specific Reciprocal Tariffs, Effective April 9, 2025.
- Section 301 “China” Tariffs, Effective 2018
- Section 201 Tariffs, Outlined in the Trade Act of 1974
- Other ordinary tariffs
Drawback-Ineligible Tariffs
Many of the executive orders linked below contain language like, “No drawback shall be available with respect to the duties imposed pursuant to this order.”
- 25% On Automotive Imports, Effective April 3, 2025
- 25% On Goods and 10% on Energy Products from Canada, Effective April 2, 2025
- 25% On Goods from Mexico, Effective April 2, 2025
- 25% On Aluminum from Most Countries, amended from 10%, Effective March 12, 2025
- 25% On Steel from Most Countries, Effective March 12, 2025
- 20% On Goods from China, amended from 10%, Effective February 5, 2025
Note on Low-Value Imports
If your organization takes advantage of any de minimis exemptions, please note that this will end for low-value imports (under $800) from China on May 2, 2025. Where available, we recommend filing drawback to offset those costs.
Ready to discover your tariff drawback potential? Let’s have a conversation about your specific situation. Set up a discovery call today.
