Re-Exporting? You Can Recover 99% of Eligible Duties.

With tariff stacks on some imports now past 30%, the duty tied up in inventory is historically large. Drawback refunds 99% of eligible duties on goods you later export, but "eligible" is the operative word, and the 2026 tariff layers do not all follow the same recovery path.

Most of the conversation about today's tariffs is about paying them. Far less goes to getting them back, which is a costly oversight when the duty stack on a single entry can exceed 30%. Duty drawback, under 19 U.S.C. § 1313, refunds up to 99% of eligible duties, taxes, and fees on imported goods that are later exported or used to make exported goods. The mistake that leaves money on the table is treating the total duty paid on an entry as one recoverable number. It is not. In 2026 an entry can carry ordinary duties, Section 301, Section 201, Section 122, Section 232, antidumping and countervailing duties, and former IEEPA duties, and each layer follows a different recovery rule. Some qualify for drawback, some are expressly limited, and some run through a separate CBP refund process entirely.

How drawback works

The mechanics are clear even if the paperwork is not. There are three common routes. Unused merchandise drawback covers imported goods exported in essentially the same condition. Manufacturing drawback covers imported inputs that go into an exported product. Rejected merchandise drawback covers goods exported because they were defective, misshipped, or non-conforming. Under substitution rules, imported and exported goods can be matched by their shared 8-digit HTSUS classification rather than tracing the exact physical unit. The refund is 99% of eligible duties, most TFTEA drawback claims run on a five-year window measured from the date of import, and exports to Canada and Mexico require extra analysis under a USMCA "lesser of" limitation, with exceptions for certain same-condition exports. The refund is real, and so is the compliance burden: a valid claim connects the import, the merchandise, the export, the applicable tariff treatment, and the amount claimed.

The 2026 question: which tariff did you actually pay?

Because the layers on a single entry now have different drawback treatment, the recoverable pool is often only a fraction of the total duty.

Generally recoverable through drawback: ordinary MFN duties, the Merchandise Processing Fee and Harbor Maintenance Tax, Section 201 safeguard duties, the temporary Section 122 surcharge that ran from February 24 to July 24, 2026, and Section 301 duties in all their current forms. That last one matters most, because Section 301 is where the largest additional duties sit. It covers the long-standing China technology-transfer lists, which run from 7.5% to over 100%, plus the new 2026 forced-labor duties and the Brazil action, and CBP has confirmed the additional duties are drawback-eligible. The practical rule is simple: do not calculate drawback from the total duty paid without first separating the layers.

Section 232 needs a closer read, not a blanket answer

A flat statement that Section 232 is never drawback-eligible is no longer accurate, and getting this wrong cuts both ways. The right questions are which Section 232 measure applies, what its specific proclamation says about drawback, and whether your goods meet the conditions.

The auto and auto-parts Section 232 action carries an express no-drawback provision. The steel, aluminum, and copper action is different. Proclamation 11021 of April 2, 2026, which restructured those duties onto the full customs value of covered derivatives effective April 6, expressly allows manufacturing drawback under 19 U.S.C. § 1313(a) and (b), and bars every other drawback type, so unused-merchandise drawback is not available on metals, but manufacturing drawback is, where the conditions are met. And the pharmaceutical Section 232 measure, Proclamation 11020 of the same date, expressly provides for drawback on its duties. So the one metals-and-pharma family that most people assume is closed to drawback actually contains two real openings, each with its own conditions.

One more rule holds across the board: if a single product is hit by both Section 301 and Section 232, the analysis runs by layer. A recoverable Section 301 portion does not make the Section 232 portion recoverable, and vice versa.

AD/CVD stays out, and IEEPA uses a different door

Antidumping and countervailing duties are not available for drawback, so they never belong in your recovery pool. And the former IEEPA reciprocal and fentanyl tariffs are not a drawback category at all. After the February 2026 Supreme Court ruling, those are refunded through CBP's separate CAPE process, which pays them back directly. The two channels do not mix: CBP has stated that entries already designated on a drawback claim are excluded from CAPE Phase 1, so the sequence of filings matters and you cannot recover the same duty twice by running one entry through both. The recovery mechanism has to match the duty.

What this means for you Map the entry by layer. Identify the ordinary HTSUS duty, Section 301, Section 201, Section 122, Section 232, AD/CVD, and fees separately, rather than treating total duty as one number. Separate the recoverable portion. On goods carrying both 301 and 232, calculate the eligible part on its own and don't claim the whole assessment. Read the specific Section 232 proclamation. Autos bar drawback, metals allow manufacturing drawback only, pharma allows drawback; the proclamation and its conditions control. Keep IEEPA on the CAPE track. If an entry may qualify for a CAPE refund, evaluate CAPE before designating it on a drawback claim, and never file both. Review older entries against the five-year clock. Qualifying imports from prior years may still be recoverable if you act, which is exactly where companies that start late find money already sitting in their history.

For years, tariff compliance answered one question: how much duty do we owe? In 2026, any company that imports and re-exports should also ask how much of what it paid it can legally recover, and through which mechanism. The duty total is just the starting point. The real analysis happens underneath it, layer by layer, and for a business with meaningful re-export activity, that is the difference between tariffs as a pure cost and tariffs as a recoverable one.

This article is informational and is not legal, customs, tax, or financial advice. Drawback and refund eligibility depends on the specific merchandise, tariff provisions, import and export records, applicable proclamations, and CBP requirements. Consult a licensed customs broker or drawback specialist before filing a claim.

SOURCES. Duty drawback under 19 U.S.C. § 1313 refunds up to 99% of eligible duties, taxes, and fees on re-exported goods, with the eligible merchandise and calculation rules set in 19 C.F.R. §§ 190.3 and 190.51 (https://uscode.house.gov/view.xhtml?edition=prelim&num=0&req=granuleid%3AUSC-prelim-title19-section1313; https://www.law.cornell.edu/cfr/text/19/190.3); CBP confirms Section 301 duties are drawback-eligible in its Section 301 FAQ (https://www.cbp.gov/trade/programs-administration/entry-summary/section-301-trade-remedies/faqs) and treated the Section 122 surcharge as recoverable in its CSMS guidance. That the steel, aluminum, and copper Section 232 action (Proclamation 11021, April 2, 2026) allows manufacturing drawback under § 1313(a) and (b) and bars all other drawback, while the pharmaceutical Section 232 action (Proclamation 11020) and the automobile action differ, is set out in the proclamations as published in the Federal Register (https://www.federalregister.gov/documents/2026/04/09/2026-06960/strengthening-actions-taken-to-adjust-imports-of-aluminum-steel-and-copper-into-the-united-states; https://www.whitehouse.gov/presidential-actions/2026/04/adjusting-imports-of-pharmaceuticals-and-pharmaceutical-ingredients-into-the-united-states/). That former IEEPA duties are recovered through CBP's separate CAPE process rather than drawback, with CAPE Phase 1 excluding entries already designated on a drawback claim, comes from CBP's CAPE guidance (https://content.govdelivery.com/accounts/USDHSCBP/bulletins/413a9f2), and the USMCA "lesser of" limitation on drawback is addressed in CBP rulings (https://rulings.cbp.gov/docs/hq/2026/h322158).