How Tariffs Impact Duty Drawback

Additional tariffs can significantly increase the value of a duty drawback program, but the existence of a tariff does not automatically mean that the additional duty is recoverable.

Drawback treatment must be evaluated based on the specific tariff action, implementing proclamation or notice, applicable Chapter 99 provision, statutory authority, and CBP guidance. Some tariff measures permit drawback, some restrict or prohibit it, and others allow drawback only under specified conditions or methodologies.

Rules current as of August 19, 2026. Tariff programs and drawback treatment can change through legislation, presidential proclamations, executive actions, HTSUS modifications, USTR notices, and CBP guidance. Eligibility should therefore be evaluated under the rules applicable to the specific duty and entry.

Can Tariffs Be Recovered Through Duty Drawback?

Sometimes.

Duty drawback generally allows eligible claimants to recover up to 99 percent of certain duties, taxes, and fees paid on imported merchandise when the applicable exportation, destruction, manufacturing, documentation, and filing requirements are satisfied.

However, an additional tariff is not automatically drawback eligible simply because it was paid at importation.

The applicable tariff authority and implementing action may:

Expressly allow drawback
Expressly prohibit drawback
Allow only certain types of drawback
Limit eligibility to particular products, countries, manufacturing activities, or supply-chain conditions
Require further analysis under the general drawback statute and implementing guidance

For this reason, tariff-related drawback eligibility should be determined at the specific duty and Chapter 99 HTSUS level, rather than by assuming that all tariffs imposed under the same statutory authority receive identical treatment.

Are Section 301 Tariffs Eligible for Duty Drawback?

Many Section 301 duties can be eligible for drawback, but the specific Section 301 action should be reviewed.

CBP has expressly confirmed that the additional duties imposed under the longstanding Section 301 China trade remedy are eligible for duty drawback.

Section 301 is no longer limited to the China tariff action. In 2026, USTR imposed additional Section 301 duties involving certain Brazilian products and separately took Section 301 action involving 60 economies in connection with forced-labor-related trade practices.

Because separate Section 301 actions can be implemented through different notices and instructions, companies should not assume that every future Section 301 tariff automatically receives the same drawback treatment as the China Section 301 duties.

The specific USTR action, HTSUS provision, and current CBP instructions should be reviewed.

Are Section 232 Tariffs Eligible for Duty Drawback?

It depends on the specific Section 232 action.

Section 232 is one of the clearest examples of why tariff authority alone does not determine drawback eligibility.

Different Section 232 proclamations currently have significantly different drawback rules.

For example:

Certain semiconductor duties: The January 2026 Section 232 proclamation expressly states that no drawback is available for the duties imposed under that proclamation.
Pharmaceuticals and pharmaceutical ingredients: The April 2026 Section 232 proclamation expressly states that drawback is available for duties imposed under that proclamation.
Aluminum, steel, and copper: Current rules provide limited manufacturing drawback under 19 U.S.C. § 1313(a) and (b) for qualifying articles that meet specified product, trade-partner, AD/CVD, and metal-origin requirements. Other drawback claims are not available for the duties covered by that provision.
Polysilicon and certain derivatives: An August 2026 Section 232 action provides manufacturing drawback for qualifying articles that satisfy specified trade-partner, AD/CVD, and polysilicon-origin requirements.

As a result, a company should not ask only, “Are Section 232 duties eligible for drawback?”

The more useful questions are:

Which Section 232 proclamation imposed the duty?
Which Chapter 99 provision applies?
What merchandise is involved?
Is manufacturing drawback specifically permitted?
Are there country-of-origin or material-origin requirements?
Is the product subject to an antidumping or countervailing duty order?
Does the applicable proclamation expressly prohibit other types of drawback?

Section 232 eligibility must be analyzed tariff action by tariff action.

What Are Section 201 Tariffs and Can They Qualify for Drawback?

Section 201 of the Trade Act of 1974 authorizes safeguard measures when increased imports are found to cause or threaten serious injury to a U.S. industry.

A new Section 201 safeguard involving certain quartz surface products took effect on August 15, 2026. The action established a four-year tariff-rate quota with specified country exclusions and changing quota and tariff treatment over time.

The current quartz surface products proclamation does not itself state a specific drawback rule in its text. Accordingly, companies should not assume either eligibility or ineligibility solely because a duty is imposed under Section 201.

The specific safeguard action, HTSUS provisions, applicable drawback statute, and any implementing CBP or USTR guidance should be reviewed before determining whether a particular Section 201 duty can support a drawback claim.

What Are Section 338 Tariffs and Can They Qualify for Drawback?

Section 338 of the Tariff Act of 1930 authorizes additional duties in response to certain discriminatory or unequal treatment of U.S. commerce by foreign countries.

In July 2026, the President issued Section 338 proclamations imposing 50 percent additional duties on specified Canadian products involving motor vehicles, dairy products, and alcoholic beverages, effective August 19, 2026.

Because Section 338 has only recently become commercially significant in the current tariff environment, companies should be particularly cautious about making assumptions regarding drawback.

The current proclamations reviewed do not expressly establish a general drawback rule for these duties. The applicable HTSUS implementation and subsequent CBP guidance should therefore be reviewed before determining whether a Section 338 duty is eligible for drawback.

What Happened to the 2026 Section 122 Import Surcharge?

Section 122 of the Trade Act of 1974 authorizes temporary import restrictions to address certain international balance-of-payments problems.

A 10 percent temporary import surcharge took effect on February 24, 2026. The proclamation established an effective period through July 24, 2026 unless the surcharge was suspended, modified, terminated earlier, or extended by an Act of Congress.

Importantly for drawback analysis, the proclamation expressly stated that the Section 122 surcharge would be treated as a regular customs duty.

Because the proclamation does not state a general prohibition on drawback and treats the surcharge as a regular customs duty, companies that paid the 2026 Section 122 surcharge should evaluate those historical entries under the applicable drawback rules rather than assuming the surcharge is unrecoverable.

Whether a refund is available will still depend on the qualifying import, export or destruction, drawback provision, timing, documentation, and other applicable requirements.

What About the 2025 and 2026 IEEPA Tariffs?

During 2025 and early 2026, additional duties were imposed under the International Emergency Economic Powers Act (IEEPA) through several tariff actions.

On February 20, 2026, the President directed the termination of additional ad valorem duties imposed under a number of those IEEPA actions, including tariffs involving Canada, Mexico, China, reciprocal tariffs, and several other country-specific measures.

Historical entries can still matter to a drawback review, but the specific IEEPA duty must be identified.

For example, the 2025 IEEPA tariff orders involving the China synthetic-opioid action and the Mexico border action expressly stated that no drawback was available with respect to the additional duties imposed under those orders.

This does not necessarily mean that every other duty appearing on the same entry is ineligible.

For example, an entry could contain:

A regular customs duty
Section 301 duties
An IEEPA additional duty
Merchandise Processing Fees
Other charges

Each component should be evaluated separately. An expressly non-drawback-eligible IEEPA duty does not automatically eliminate a potential claim involving other eligible duties on the same merchandise.

Can Antidumping or Countervailing Duties Be Recovered Through Duty Drawback?

No.

Antidumping duties and countervailing duties themselves are not eligible for duty drawback.

Under 19 U.S.C. § 1677h, antidumping and countervailing duties are not treated as regular customs duties for purposes of drawback law.

However, merchandise subject to an antidumping or countervailing duty order may also have other duties associated with the importation.

The presence of AD/CVD therefore does not necessarily mean that no drawback opportunity exists. Other eligible duties should be analyzed separately, subject to any additional restrictions imposed by the applicable tariff program.

This distinction is particularly important under current Section 232 rules because some manufacturing drawback provisions specifically exclude articles of a type subject to an antidumping or countervailing duty order.

What About Other Tariffs and Trade Actions?

Additional duties can arise under Section 201, Section 232, Section 301, Section 338, Section 122, and other statutory or presidential authorities.

New tariffs may also be implemented through:

New Chapter 99 HTSUS provisions
Presidential proclamations
USTR actions
Federal Register notices
Trade agreements
Country-specific actions
Product-specific safeguards
Modifications to existing tariff programs

The key principle is that drawback eligibility should be determined from the specific legal action imposing the duty, not simply from the name of the tariff authority.

When a new tariff is announced, companies should confirm the actual implementing language before assuming that the additional duty is either eligible or ineligible for drawback.

Does a New Tariff Automatically Qualify for Duty Drawback?

No.

A new tariff should be reviewed before it is incorporated into a drawback program.

The analysis should generally identify:

The Chapter 99 HTSUS provision under which the additional duty was paid
The statutory authority for the tariff
The proclamation, executive action, USTR notice, or other implementing document
Any language specifically allowing or prohibiting drawback
Whether only certain types of drawback are permitted
Product, country, origin, or supply-chain restrictions
Applicable CBP implementation guidance
Whether the merchandise is subject to other duty programs that affect eligibility

This review is especially important when tariff policies are changing rapidly.

Why Can Tariffs Increase the Value of a Duty Drawback Program?

Additional tariffs can materially increase the duties paid when merchandise enters the United States.

If those duties are eligible for drawback and the corresponding merchandise or manufactured articles satisfy the applicable requirements, the additional tariff expense may increase the amount potentially recoverable.

For example, merchandise subject to both an ordinary customs duty and an eligible additional tariff may create a larger potential refund than the same merchandise would have created before the additional tariff was imposed.

However, recovery does not always increase in a simple one-to-one relationship with the tariff rate.

Factors such as:

Tariff-specific restrictions
Substitution lesser-of calculations
Product classification
Country of origin
Manufacturing methodology
Export destination
Duties actually paid
Other statutory limitations

can affect the final drawback amount. General drawback calculations can provide recovery of up to 99 percent of eligible duties, taxes, and fees, subject to the applicable rules.

Common Scenarios Where Tariffs and Duty Drawback Intersect

Tariff-related drawback opportunities may arise when companies:

Import merchandise subject to eligible additional tariffs and later export qualifying merchandise
Use tariffed imported materials or qualifying substitute merchandise in U.S. manufacturing and export the finished products
Purchase duty-paid merchandise from domestic suppliers and later participate in qualifying export transactions
Sell merchandise domestically that is subsequently exported through qualifying downstream transactions
Destroy qualifying merchandise under an applicable drawback provision and CBP requirements
Discover historical imports and exports for which drawback was never claimed

The applicable tariff must still be evaluated to determine whether the additional duty itself is recoverable.

What Documentation Is Needed to Recover Tariff Duties?

Tariff-related drawback claims generally require documentation supporting both the underlying drawback transaction and the additional tariff being claimed.

Records may include:

Import entry data
Entry summary information
Chapter 99 and underlying HTSUS classifications
Evidence of duties and tariffs paid
Commercial invoices
Product and part-number data
Inventory and merchandise-transfer records
Manufacturing records and bills of material, when applicable
Export documentation
Destruction records, when applicable
Country-of-origin or material-origin data when required by the tariff measure

Accurate Chapter 99 classification is particularly important because two goods with the same underlying HTS classification may be subject to different additional duties or different drawback restrictions.

For more information, see What Documentation Is Required for a Duty Drawback Claim?

How Far Back Can Tariff-Related Duty Drawback Be Claimed?

Tariff-related drawback is subject to the same applicable statutory timing framework as the underlying drawback claim.

A drawback entry generally must be filed no later than five years after the date the merchandise on which drawback is claimed was imported. Individual drawback provisions also impose requirements governing when the corresponding exportation or destruction must occur.

This makes historical analysis particularly valuable when a company has paid significant tariffs for several years but has not previously operated a drawback program.

For more information, see How Far Back Can You Claim Duty Drawback?

How Does J.M. Rodgers Evaluate Tariff Drawback Opportunities?

J.M. Rodgers evaluates tariff exposure together with import, export, manufacturing, and supply-chain activity to determine which duties may be recoverable.

The review may include:

Identifying Chapter 99 and underlying HTSUS classifications
Determining which additional duties were actually paid
Reviewing the legal authority and implementing action for each tariff
Separating potentially recoverable duties from duties expressly excluded from drawback
Evaluating direct identification and substitution opportunities
Evaluating manufacturing drawback when tariff-specific rules permit it
Reviewing domestic supplier and downstream customer transactions
Analyzing historical import and export activity
Identifying documentation and data required to support claims

Because tariff rules can change, tariff-specific eligibility should be reviewed as part of ongoing drawback program administration rather than treated as a one-time determination.

Next Steps

If your company is paying significant tariffs or has paid additional duties in recent years, those entries should be evaluated individually to determine which duties may be recoverable through drawback.

J.M. Rodgers can review your import data, Chapter 99 classifications, tariff payments, exports, manufacturing activity, and supply-chain structure to identify potential drawback opportunities and distinguish eligible duties from duties subject to specific drawback restrictions.

Disclaimer

This information is general in nature and does not constitute legal advice. Tariff programs and drawback rules can change. Eligibility depends on the specific duty, merchandise, country of origin, entry date, tariff authority, implementing action, drawback methodology, documentation, and other applicable requirements.