Revamped Tariff Repayments: How Duty Drawback Aid Empowers Companies in the Aftermath of the Post-De Minimis Period
In the ever-evolving landscape of international trade, a centuries-old program is gaining renewed attention: Duty Drawback. This underutilized tool in the tariff survival kit can recover up to 99% of duties, tariffs, and certain fees paid on goods that are imported and later exported in the same condition.
Duty drawback isn't a loophole - it's a program designed to keep U.S. trade competitive. High-return categories like apparel and footwear particularly benefit from drawback, as international returns can be refunded under drawback rules.
In today's post-de minimis, high-tariff environment, duty drawback is one of the few levers that can immediately improve cash flow without disrupting operations or customer experience. For many ecommerce brands, this means higher landed costs, tighter margins, and a need to adapt before peak season.
A simple scenario illustrates the potential savings. A brand importing $500,000 worth of footwear from Vietnam and exporting 10% of that inventory to customers in Canada and the UK could recover nearly $6,000 in duties.
But why is duty drawback often overlooked? Misconceptions abound, such as thinking that brands are not big enough, it's too complex, it takes too long, or they don't export enough. However, if a brand ships to Canada, Mexico, the UK, the EU, or Australia from U.S. inventory, even occasionally, they may qualify for Duty Drawback.
Unused Merchandise Drawback, Rejected or Destroyed Merchandise Drawback, and Manufacturing Drawback are the most relevant categories for ecommerce brands. "Unused Merchandise" must leave the U.S. in substantially the same condition they arrived. Repackaging for shipping is fine; altering the product is not.
The U.S. de minimis exemption for all countries ended on August 29, 2025, making duty drawback more crucial than ever. Moreover, duty drawback allows for filing retroactive claims for up to five years, meaning waiting means leaving real money on the table.
A licensed customs broker can manage the Duty Drawback process. Initial setup can take months, but once in place, refunds can be processed in as little as 3-6 weeks. Drawback works best when it's integrated into a broader U.S. fulfillment model, especially for brands shifting to in-country enablement.
Drawback is also powerful for hybrid fulfillment models that blend cross-border DTC shipping with in-country inventory. It's useful for seasonal or promotional exports, such as sending U.S. stock to an overseas warehouse for a holiday push.
In conclusion, Duty Drawback offers a significant opportunity for ecommerce brands to protect their margins without passing the entire cost onto customers. If a brand is importing into the U.S. and exporting - even occasionally - it's time to explore the potential of duty drawback. The only wrong move is ignoring it.
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