Quick Answer: Duty drawback refunds 99% of duties, taxes, and fees paid on imported merchandise that is later exported, destroyed, or used to manufacture exported goods. Claims are filed electronically in ACE and can reach back five years from the import date. Section 301 China tariffs are drawback-eligible; Section 232 steel and aluminum tariffs are not; and the IEEPA tariffs struck down by the Supreme Court in February 2026 are refunded through CBP’s CAPE process — not drawback.

What Duty Drawback Is

Drawback, under 19 U.S.C. §1313 and the modernized regulations at 19 CFR Part 190, is the government’s oldest export incentive: import merchandise, pay duty, then export or destroy it — and recover 99% of the duties, taxes, and fees. For importers who re-export returned goods, serve foreign customers from US inventory, or manufacture in the US for export, it is routinely the largest unclaimed refund on the books.

The Three Main Types

Unused merchandise drawback (§1313(j)): imported goods exported or destroyed without being used in the US. Under TFTEA substitution rules, you can match exports against imports of merchandise classified under the same 8-digit HTS subheading — no need to trace the exact physical unit
Manufacturing drawback (§1313(a)/(b)): imported materials used to produce goods that are exported — chemicals, components, ingredients. Substitution is allowed within the same 8-digit HTS; a drawback ruling establishes the process with CBP in advance
Rejected merchandise drawback (§1313(c)): goods that were defective, non-conforming to sample or specification, or shipped without consent, then returned to the seller or destroyed

Drawback is money you already paid. Getting it back is a recordkeeping problem.

The claim stands or falls on whether you can trace the imported article through to the export or destruction, and on filing inside the statutory window. Importers rarely lose drawback because they were not entitled to it. They lose it because inventory, customs entries and sales records were never tied together while the goods were moving.

We build the accounting trail that makes the claim provable. Call 631-349-1661 or send us the details and we will give you a straight answer.

Which Tariffs Qualify — the 2026 Map

This is where importers most often get bad information, because the answer changed repeatedly:

Regular (Chapter 1–97) duties, taxes, and fees: drawback-eligible
Section 301 tariffs (the China lists): drawback-eligible, per CBP’s trade remedy guidance — claims must report both the Chapter 99 number and the underlying HTS number
Section 232 steel, aluminum, and copper tariffs: not drawback-eligible — CBP has maintained this restriction since 2018 through the current expanded rates
IEEPA tariffs (2025 “reciprocal” and trafficking-related tariffs): struck down by the Supreme Court in Learning Resources v. Trump (February 20, 2026). CBP stopped collecting them on February 24, 2026, and refunds of previously paid IEEPA duties run through CBP’s CAPE process in ACE — a separate administrative refund mechanism, not a drawback claim. For importers whose entries are already finally liquidated, refund entitlement for non-litigants remains contested on appeal, which is exactly why entry-by-entry analysis matters before assuming a check is coming

A Worked Example

A distributor imports $4,000,000 of hardware annually under an HTS line carrying 6.5% duty plus Section 301 List 3 at 25% — total duties of $1,260,000 per year. About 30% of unit volume is exported to Canadian and EU customers from US inventory within three years of import.

Duties attributable to exported volume: $1,260,000 × 30% = $378,000 per year
Drawback recovery at 99%: about $374,000 per year
With the five-year lookback, a first-time claimant with consistent history may have roughly $1.8 million of recoverable duties standing behind it

The recovery is real, but so is the documentation: import entry summaries, inventory records tying imports to exports under an approved accounting method, and proof of export for every claimed shipment.

Filing Mechanics and Timing

Claims are filed electronically in ACE. A claim is timely if transmitted within five years of the import date of the designated merchandise (19 CFR 190.51); miss the window and the claim is abandoned. Two accelerators are worth pursuing for ongoing programs: accelerated payment (refund paid within weeks of filing, secured by a bond, rather than after liquidation) and waiver of prior notice for unused merchandise exporters. Manufacturing claimants generally operate under a general or specific manufacturing ruling. Records supporting each claim must be retained for at least three years after liquidation of the claim.

Common Mistakes

Assuming drawback died with the new tariff era — Section 301 duties, often the largest component, remain claimable
Trying to claim Section 232 duties, or filing drawback claims for IEEPA refunds that belong in CAPE
Destroying or exporting goods before establishing the documentation trail, leaving value on the table
Letting the five-year clock run while “getting to it next quarter” — every quarter of delay permanently expires a quarter of refunds
Inventory records that cannot tie exports to imports under an accepted accounting method (FIFO, low-to-high, specific identification)

FAQs

Do I need to be the importer of record to claim drawback?

Not necessarily — the right to claim can be transferred between parties in the supply chain, such as from the importer to the exporter, with proper documentation.

How long do refunds take?

Without accelerated payment, claims wait for liquidation and can take a year or more. With accelerated payment privileges and a bond, refunds typically arrive within weeks of a complete claim.

Can I claim drawback on goods sold to a US customer who then exports?

Possibly — if the export can be documented and the claim rights are assigned through the chain. This is a common recovery for distributors selling to exporters.

What about goods destroyed rather than exported?

Destruction under CBP supervision (or with proper notice procedures) supports drawback for unused and rejected merchandise — relevant for returns, obsolete stock, and failed quality lots.

Is drawback audited?

Yes — CBP verifies claims and can demand full documentation years later. The 99% refund comes with a compliance program attached, which is why the accounting design matters as much as the filing.

Recover What You’re Owed

We help importers quantify drawback potential, build the inventory and export documentation that survives CBP review, and coordinate claims alongside tariff refund recovery. Start with our tariff refund application or schedule a consultation. Related reading: how to apply for a tariff refund and how to account for a tariff refund.

Drawback and an IEEPA refund are different claims but they hit the ledger the same way: the recovery follows wherever the original duty was recorded. If you are working out which account a recovery reduces and when you may recognise it, the tariff refund treatment decider applies the same four rules to your facts.

Talk to an accountant who works in your industry

Precision Accounting & Consulting works with contractors, law firms, medical practices and property owners across the country. If something on this page raised a question about your own books, send it over and we will give you a straight answer.