CASE STUDY

Unlocking Duty Drawback in a High-Tariff Trade Environment

Client Mid-Sized U.S. Manufacturer  Challenge Prior to the introduction of reciprocal tariffs, the manufacturer paid little to no duty or import taxes on raw materials and components, and duty drawback was not viewed as a meaningful opportunity. The implementation of reciprocal tariffs, applied broadly across multiple countries and product categories, significantly increased duty exposure and…

Client

Mid-Sized U.S. Manufacturer 

Challenge

Prior to the introduction of reciprocal tariffs, the manufacturer paid little to no duty or import taxes on raw materials and components, and duty drawback was not viewed as a meaningful opportunity. The implementation of reciprocal tariffs, applied broadly across multiple countries and product categories, significantly increased duty exposure and materially impacted landed costs and margins.

At the same time, the manufacturer produced finished goods in the United States and exported a large portion of its sales. Despite clear drawback eligibility, the company had limited awareness of drawback regulations, lacked internal expertise to manage the complexity, and did not have the documentation or processes required to pursue refunds. Without a formal drawback program in place, substantial recoverable duties were at risk of expiring unused.

Solution

J.M. Rodgers partnered with the manufacturer to design and implement a comprehensive duty drawback program from the ground up. The JMR team conducted a detailed review of import activity, export transactions, and manufacturing operations to confirm eligibility under reciprocal tariff programs and standard duty drawback provisions.

Recognizing the client’s limited prior exposure to drawback, J.M. Rodgers provided education, structured onboarding, and hands-on program development. The drawback program was fully integrated with the client’s customs brokerage and export workflows, ensuring accurate data capture, compliance with CBP regulations, and long-term sustainability.

Outcome

  • Established a compliant duty drawback program where none previously existed
  • Identified significant refund opportunities driven by reciprocal tariff exposure
  • Positioned the manufacturer to recover millions of dollars in duties paid
  • Improved cash flow and global competitiveness through tariff recovery
  • Created a scalable framework to capture future drawback opportunities

Key Takeaways

  • Reciprocal tariffs have dramatically expanded the duty drawback opportunity across industries
  • Manufacturers with export activity are often eligible even if they historically paid little or no duty
  • Companies meeting this profile should not delay drawback program setup in anticipation of U.S. court decisions, as duties are likely to continue, potentially applied in different forms, making early mitigation strategies critical
  • Expert guidance is essential to navigating complexity and maximizing recovery