Duty Drawback: Recovering Up to 99% of Tariffs Paid

You paid the duties. Now get most of them back.

Duty drawback is a U.S. Customs program that allows companies to recover up to 99% of duties, taxes, and fees paid on imported goods that are subsequently exported — either in their original form or as part of a finished product. Despite its potential value, many retail and CPG companies have not pursued drawback claims, largely because the program has a reputation for administrative complexity that discourages initial engagement.

The most common application involves companies that import goods into the United States and later export a portion of that inventory to international customers. This includes e-commerce brands with a meaningful international customer base and wholesale distributors supplying foreign retailers or distributors.

The financial opportunity can be substantial. A company importing $1 million in dutiable goods annually and exporting 30% of that inventory could recover tens of thousands of dollars in duties each year. Compounded over multiple years, this represents a meaningful improvement to margins and cash flow that requires no change to the underlying business model.

The primary administrative challenge is documentation. To support a drawback claim, companies must be able to link specific import entries to corresponding export transactions and maintain detailed records throughout the process. Many businesses choose to work with a licensed customs broker or third-party drawback specialist to manage the claim process efficiently and maximize recoverable amounts.

Bottom Line: Duty drawback is one of the more powerful and underutilized margin improvement tools available to businesses with international sales activity.