Chinese-origin goods subject to the new Section 301 tariffs qualify for duty drawback. For exporters, the duty drawback eligibility will help mitigate the costs resulting from the increased tariffs.

A few days before the tariffs went into effect, the US government announced that the Section 301 duties would qualify for duty refund. When exporters’ products are sourced overseas for eventual export, the duties paid to import those goods are eligible for a refund (or drawback). The imported materials do not necessarily need to be the final product; components which will comprise the exported finished goods are also eligible.

Duty Drawback
Duty drawback was initially established in1789 as an export incentive program to promote US innovation and manufacturing around the world. It allows a monetary rebate of certain duties on goods imported into the US. If these goods are then exported afterward, importers, exporters, and manufacturers could be eligible for a refund. Please read our blog on duty drawback for additional information.

Section 301 Tariffs
Section 301 is a statute allowing the executive branch to enact trade-related remedies in response to actions of foreign governments. The US imposed Section 301 tariffs on many imported Chinese goods to protect domestic technology and intellectual property from China’s discriminatory trade practices, “stop noneconomic transfers of industrially significant technology and intellectual property to China, and enhance access to the Chinese market.”

To evaluate your duty drawback potential, Deringer provides an estimation calculator. Additionally, for help determining if your products fall under these tariffs or for additional information about duty refunds through drawback, please contact Anne Jordanek.