Reconciling accounts with a client, we noticed part of the inventory he had imported into his US warehouse — duties fully paid — had later shipped onward to customers in Canada and Mexico. I asked: “did you claim those duties back?” He froze. Years of running a US warehouse, first time hearing that import duties can come back. The money has a name — duty drawback — and it is not an obscure perk; it is a formal regime written into US tariff law.
Written by SKYCARGO INC, a US logistics company shipping between the US and Taiwan since 2014 and incorporated in the US in 2023, with warehouses in Oregon, Los Angeles and Taoyuan; it serves as an FDA U.S. Agent and can assist clients with USDA registrations and inquiries. More on this topic: US Customs & Tariffs: The Complete Guide Index.
The logic: duty is paid for consumption in America
Tariffs rest on goods entering US commerce. When goods later leave the US — re-exported, or destroyed under supervision — the basis for the duty disappears, and the vast majority of it is refundable (the statutory refund share is very high; exact proportions and math follow current CBP rules). How the layers of duty are paid at entry is the prequel; this is the sequel where one slice comes back.
Three types: find your seat
- Unused merchandise drawback: goods entered the US, were never used or processed, and exported onward as-is — the US-warehouse-ships-global seller’s type. Under substitution rules you need not trace “the same box”; commercially interchangeable goods can match
- Manufacturing drawback: imported materials or components, processed or manufactured in the US, finished goods exported — duties paid on the inputs come back; fits operations with US-side assembly, repacking or production
- Rejected merchandise drawback: goods off-spec, defective, refused — returned or destroyed under customs supervision. The most-forgotten type, because when it happens everyone is fighting the complaint and nobody thinks about the duty
The price: years of reach-back, heavy documentation
Drawback’s signature is generous time, strict paper:
- The reach-back runs years: start organizing now and exports from prior years are still claimable — “we didn’t know” does not mean the money is gone
- Import and export documents must correspond: the core burden is proving the exported goods are (or validly substitute for) the duty-paid goods — entry data, inventory records and export proof chained together
- Claims run through a dedicated system: drawback has its own filing regime and specialist brokers, typically compensated as a share of the refund — no refund, no big fee
The document chain decides everything: a company whose inventory system already maps which import lot fed which export claim has an organizing task; a company with blended records faces reconstruction — the real cost.
Who needs this most: warehouse in America, orders everywhere
Sellers running the LA port warehouse plus Oregon tax-free warehouse pattern are the textbook money-leavers: goods enter in bulk with full duties, then ten or twenty percent forwards to Canadian, Mexican and Latin American customers — and that share of duty quietly stays with customs, year after year. Three classic scenarios: the US warehouse as a regional hub; returns flowing back out; transshipment and reallocation to other markets. The higher tariffs climb, the bigger this refund gets — every extra percentage point paid at entry is refundable base on the way out.
Where SKYCARGO fits
SKYCARGO INC’s job in drawback is laying the document chain: goods shipped through us with the entry data in hand (the Importer of Record is normally you, as a non-resident importer, with entries filed through our partner licensed customs broker), warehouse movements recorded, re-export papers complete — when you claim, the evidence exists. We act as Importer of Record for a client’s goods in one situation only: when we are your selling agent in the US — under a long-term agency agreement, actually finding buyers and taking orders for you in the US, paid a commission on sales, with warehousing, delivery and customer service continuing after import, and, for food, running the FSVP ourselves. We take these cases only when all of those conditions are met. We do not act as a nominal consignee, collect and forward payments only, or sign a power of attorney only. The claim itself runs through specialist procedure and tax judgment — engage a drawback broker or compliance counsel; we make the logistics-side records correspond. B2B shipments, talk to us. (Personal parcels: Shiptw.)
Drawback rules and refund proportions follow current CBP law. Reference only; consult compliance counsel for specific cases.
