The customs duties in the world of high stakes of the global commercial world in 2026 have become seen in many ways as a sunk cost; a toll that cannot be avoided during the importation of goods.
Nonetheless, in firms that import and later on export, the Duty Drawback program is the biggest financial reset button. According to 19 U.S.C. § 1313, the US government permits companies to refund up to 99 percent of the duties, taxes, and expenses that had earlier been paid on imported goods which were subsequently exported or destroyed. In the case of a high-volume exporter, this is able to reverse millions in expenses into working capital in terms of taxes.
How does 'Unused Merchandise Drawback' work for distributors?
In case your business is importing finished products (e.g., electronic products or luxury clothes) and then exporting them to foreign markets without consuming them in the US, then you qualify to receive the Unused Merchandise Drawback (1313(j)). Experienced IRS tax experts (former IRS tax agents, a former auditor, and the best tax attorneys) can help to navigate the US export market.
The unused requirement is strictly observed, but the regulations of 2026 permit incidental use such as testing, cleaning, or repacking. Clawback nearly all the original tariffs, including the high Section 301 tariffs commonly levied on goods of Chinese origin, as long as the goods are exported less than five years following the import date.
What is the advantage of 'Substitution' in manufacturing?
Startups in manufacturing may have to endure a logistical nightmare: knowing which imported bolt was used in what exported machine. Substitution Drawback is an answer to this, as it enables one to pair imported duty-paid goods with what the government calls commercially interchangeable native or imported items. In the modernized TFTEA regulations of 2026, it is possible to claim a refund with a match of 8 digits HTS (Harmonized Tariff Schedule).
In case you import that high-rated component, and in your exports you utilize the same domestic component, you still may enjoy the drawback of the imported duties, should the substitution be made within the stipulated five-year time frame.
Can you reclaim more than just basic customs duties?
Yes. One of the biggest misunderstandings is that the drawback of duty concerns the standard tariff only. As a matter of fact, the program will permit the recovery of internal revenue taxes (including Federal Excise Tax on alcohol or tobacco), Merchandise Processing Fees (MPF), and Harbor Maintenance Fees (HMF).
These secondary charges are up to 15-20 percent of the overall recoverable volume to shippers of heavy volumes. However, it is important to note that in 2026, the drawback cannot be eligible for the Antidumping and Countervailing Duties (AD/CVD).
How has the 2026 'Electronic Refund' mandate changed the process?
As of February 6, 2026, paper refund checks are abolished in the US Customs and Border Protection (CBP). Indeed, all the drawback payments have now been realized through Automated Clearing House (ACH).
Businesses will have to enroll in the ACE Secure Data Portal in order to access them. Experienced IRS tax experts (former IRS tax agents, a former auditor, and IRS tax debt attorneys) can help to get that electronic refund.
Moreover, when your business needs faster liquidity, you can apply Accelerated Payment (AP) Privileges. AP gives you the opportunity to get your 99% refund on a conditionally defective bond within 4-6 weeks of filing, instead of having to wait a year or more to have the claim liquidated.
Conclusion
The Duty Drawback program is the final second chance of your tax plan. You can reimburse almost all of the money spent on trade barriers by ensuring that your import-to-export lifecycle is well documented and that you use the 8-digit HTS rules of substitution.
In the trade environment that will be present in 2026, in which margins are narrow and tariffs are high, duty drawback is not only a latent key but an essential cornerstone of a strong supply chain.
