Letter from the CEO: Section 122 Tariffs, IEEPA Duties, and Duty Recovery Strategy

There was a lot packed into this week. CBP rolled out guidance on the temporary 10 percent Section 122 surcharge, and at the same time officially stopped collecting certain IEEPA duties after the Supreme Court decision. On paper, one duty ends and another begins. In practice, it is not that simple.

What stands out to me is how broad Section 122 is. A 10 percent surcharge applied across a wide range of imports is not a targeted measure. It is a blunt instrument. For high volume importers, that is a meaningful cost layer, even if it is temporary. It forces pricing conversations, margin analysis, and internal decisions about who absorbs that impact.

On the IEEPA side, ending collection is only part of the story. The bigger question is what happens to duties already paid. Will we receive guidance allowing recovery through PSCs or protests? Or will the administration push back and make that process more difficult? That path is still unclear.

This is where duty drawback remains especially important. Companies exporting goods that were subject to IEEPA duties do not have to sit and wait for refund guidance. They can move forward with drawback claims now on eligible exports. Section 122 duties are drawback eligible as well, which means this temporary surcharge should immediately be part of a broader recovery strategy. If Customs later provides a defined path for IEEPA refunds outside of drawback, companies can then assess what was not claimed and pursue recovery accordingly.

The key is coordination. Drawback strategy and potential refund claims need to be handled carefully to avoid overlap or compliance issues. This is not something to approach casually. It requires documentation discipline and an experienced, compliant drawback provider.

This is not just a policy shift. It is a cost recovery conversation. And the companies that approach it strategically will be in a much stronger financial position.