Duty Drawback in 2026: Which Tariffs Are Refundable and How to File in ACE

Duty drawback remains one of the most valuable opportunities for importers to recover customs costs, yet it is still widely underused. The program allows businesses to recover up to 99 percent of certain import duties, taxes, and fees when imported goods, or qualifying substitutes, are later exported or destroyed instead of entering US commerce. Governed by 19 U.S.C. 1313 and the modernized rules in 19 CFR Part 190, every drawback claim is now filed electronically through CBP's Automated Commercial Environment (ACE). The challenge in 2026 is not understanding that drawback exists. It is knowing which tariff layers qualify, which do not, and how to build a claim that stands up to CBP review. 

What Drawback Actually Refunds 

CBP defines drawback as the refund of certain duties, internal revenue taxes, and fees collected on importation when the merchandise is later exported or destroyed. Under Part 190, drawback reaches "any duty, tax, or fee imposed under Federal law upon entry or importation," provided the statutory conditions for the relevant provision are met, and the refund is capped at 99 percent of the amount paid on the imported merchandise. The one percent CBP retains covers the administrative cost of running the program.

Modernized drawback is organized into a few operational categories, each with its own subpart of Part 190:

• Unused-merchandise drawback, direct identification (1313(j)(1)): Imported merchandise is exported or destroyed under CBP supervision without being used in the United States. Operations short of manufacture or production do not count as "use," so light handling, testing, or repackaging does not disqualify a claim.

• Substitution unused-merchandise drawback (1313(j)(2)): Exported or destroyed merchandise is commercially interchangeable with the imported merchandise, with substitution measured against an 8-digit HTS standard rather than the old "same kind and quality" test.

• Manufacturing drawback (1313(a) and (b)): Imported merchandise or qualified substitutes are used to manufacture articles that are then exported or destroyed, under a general or specific manufacturing drawback ruling.

• Rejected-merchandise drawback (1313(c)): Duty-paid merchandise is exported or destroyed because it did not conform to sample or specification, was shipped without consent, or was defective at import.

For most importers sitting on large duty bills, the unused-merchandise provisions are the entry point, because they do not require a manufacturing ruling and turn on a straightforward question: did the goods, or interchangeable substitutes, leave US commerce within the statutory window?

Which Tariff Programs Are Refundable in 2026 

The direct-identification provision covers any duty, tax, or fee imposed on entry, but CBP guidance draws sharp lines between the trade-remedy programs. Getting these right is the difference between a paid claim and a denied one.

Section 301 China Duties: Eligible

CBP's drawback trade-remedies guidance confirms that Section 301 duties are eligible for drawback. An importer paying the 25 percent Section 301 duty on List 1 through List 3 China-origin goods, or 7.5 percent on List 4A, can recover up to 99 percent of those duties when the goods or commercially interchangeable substitutes are exported or destroyed within five years. Drawback eligibility for Section 301 runs on the traditional 19 U.S.C. 1313 track and is entirely separate from any IEEPA refund process, so a company can pursue Section 301 drawback regardless of what happens with emergency-tariff litigation. Because the duty rate is high, Section 301 recovery is often where the largest drawback dollars sit; teams still mapping which of their China lines carry the surcharge can start with a Section 301 rate check before modeling recovery.

Section 201 Safeguard Duties: Eligible

The same CBP guidance treats Section 201 safeguard duties, such as those on solar cells and washing machines, as drawback-eligible. Importers subject to safeguard measures can recover those duties under Part 190 when affected merchandise or qualifying substitutes are exported or destroyed, on the same five-year and recordkeeping terms as any other unused-merchandise claim.

Section 232 Steel and Aluminum Duties: Not Eligible

This is the exclusion that trips up filers most often. CBP has stated consistently, referencing CSMS 18-000317, that no drawback is available for Section 232 duties on steel and aluminum articles, and later guidance extends that exclusion to the expanded derivative-product tariffs. Even where the underlying steel or aluminum article would otherwise qualify for unused-merchandise, substitution, or manufacturing drawback, the Section 232 duty itself cannot be recovered. Attempting to claim it invites denial and can draw CBP scrutiny to the rest of a filer's claims. The practical rule for 2026 is simple: Section 232 duties stay a permanent cost, and the interaction between them and recoverable layers is one reason Section 232 exposure needs to be modeled separately from the rest of a duty stack.

IEEPA-Based Tariffs: A Different Program Entirely

Drawback and IEEPA tariff refunds are distinct mechanisms with different triggers. Drawback is permanent and turns on what happens to the goods; an IEEPA refund arises from a judicial determination that a specific emergency tariff was never lawfully owed, and those refunds are being administered through CBP's CAPE process rather than Part 190. The safe posture for 2026 content and compliance is to keep the two separate: do not designate IEEPA-based duties in a drawback claim, and do not assume a blanket rule exists, because CBP has not issued one and individual actions are being routed through separate refund channels.

Fees and Taxes

TFTEA broadened drawback access to fees. The Merchandise Processing Fee and Harbor Maintenance Fee can be included in a claim when they were paid on the designated import entry, and the exported or destroyed merchandise qualifies. Certain internal-revenue taxes, such as those on alcohol-based products, are handled through specialized subparts. The general takeaway is that many common duty and fee layers are recoverable, but each must be checked against the specific subpart that governs it.

Eligibility Conditions and Time Limits

The Five-Year Clock

Most drawback claims must be filed within five years of the date of importation of the designated merchandise. Section 190.31(b) requires that, for direct-identification unused-merchandise drawback, exportation or destruction occur before the close of the five years beginning on the date of importation and before the claim is filed. Import entries up to five years old can still be designated in a current claim as long as the corresponding export or destruction happened inside that window. Miss it, and refundable duties convert into permanent cost with no recovery path.

Export and Destruction Proof

Exportation or destruction is the core eligibility event, and CBP has to be able to verify it. Subpart G of Part 190 sets out the requirements, including CBP supervision for destruction and acceptable proof of export such as bills of lading and carrier records. A complete ACE claim has two parts: successful electronic acceptance of the claim data, and submission of the supporting documents through the Document Image System, generally within 24 hours of acceptance. Common supporting documents include export bills of lading, commercial invoices, packing lists, proof of destruction under CBP supervision, and, for manufacturing claims, production records.

Substitution Standards

TFTEA replaced the subjective "same kind and quality" test with a codified 8-digit HTS or Schedule B standard for many categories. Substitution unused-merchandise drawback under 190.32 lets a claimant designate imported merchandise and export or destroy commercially interchangeable merchandise measured against those tariff-number standards. The mapping still has to be done carefully: an error in matching import and export classifications is a frequent basis for CBP denial.

Recordkeeping

Record retention runs on a "three years from liquidation" standard, not three years from payment. Section 190.15 requires that all records pertaining to a drawback claim be retained for three years after liquidation of the claim, and 190.38 restates that for unused-merchandise claims. Because liquidation can occur well after the refund lands, records often have to be kept longer than filers expect. Inadequate records are one of the surest ways to lose a claim during verification and can trigger reliquidation of drawback already paid.

How to File in ACE

Electronic-Only Since 2019

Paper drawback claims have not been accepted since February 2019. Every claim is filed electronically in ACE under TFTEA and Part 190, and first-time filers choose among three routes: hire a licensed customs broker with ABI software, self-file through a service bureau that provides both software and the CBP communications link, or build a direct connection to CBP's Data Center, a process CBP notes can take three to six months.

Core Data Elements

CBP's Drawback in ACE guidance lists the primary data a claim must carry:

• Drawback entry number and filing port code

• Claimant identification number

• Drawback provision (for example 1313(j)(1), 1313(j)(2), 1313(a), or 1313(c))

• Claim date and total drawback amount requested

• Import entry summary and HTS data

• Information on exportation or destruction, and notice of intent to export or destroy where applicable

ACE caps a single claim at 10,000 records across import, manufacturing, and export or destroyed records. If CBP rejects a submission, ACE returns an automated message naming the data element that caused the rejection, and the claim can be corrected and resubmitted within the amendment period.

2026 Routing Through the PNGM Center

As of 2026, CBP consolidated drawback processing under the Petroleum, Natural Gas, and Minerals Center of Excellence and Expertise. Claims transmitted in ACE route directly to the PNGM Center and are assigned internally by the first character of the importer of record. Claims and applications filed before the transition remain at the office that originally received them, but new electronic claims move through the PNGM structure. High-volume filers should also weigh the Part 190 privileges that improve cash flow: waiver of prior notice, which removes the per-transaction CBP Form 7553 filing before export or destruction, and accelerated payment, which releases refunds before the claim liquidates, both subject to bonding.

Common Mistakes and What They Cost

The failure patterns are predictable, and each carries a concrete consequence:

• Claiming Section 232 duties: CBP's guidance is explicit that Section 232 steel and aluminum duties are not refundable through drawback. These claims are denied and can widen CBP's review of the filer's other claims.

• Confusing IEEPA refunds with drawback: Designating IEEPA-based duties in a Part 190 claim attacks the wrong statute and misaligns the records for both programs, complicating each.

• Missing the five-year window: Exporting or destroying after the statutory period, or filing late, is fatal to the claim and converts recoverable duty into sunk cost.

• Thin export or destruction proof: If the documentation does not clearly tie exports or destructions back to the designated imports, CBP can deny the claim or open a verification exam.

• Weak recordkeeping: Claims rest on chains of import entries, transfers, and export proofs that must survive three years past liquidation; gaps can force reliquidation of drawback already paid.

The through-line is that drawback rewards precision. The importers who recover the most are the ones who treat eligibility mapping, classification matching, and document retention as an ongoing discipline rather than a one-time filing exercise. That is also where automation earns its place: repricing a duty history to find which entries carry recoverable Section 301 or Section 201 layers, and which carry non-recoverable Section 232 duty, is exactly the sorting that decides how large a defensible claim can be.

Building a Drawback Program That Holds Up

The companies recovering meaningful duty through drawback are the ones that understand their duty exposure before they begin filing. They have identified which tariff layers are refundable, organized the records needed to support a claim, and confirmed that every filing meets CBP's eligibility and documentation requirements. For importers with years of Section 301 or Section 201 duties, the recovery opportunity can be substantial, but only when the five-year deadline, substitution rules, and supporting records all align.

Explore Gaia Dynamics to identify recoverable duty across historical imports, compare drawback eligibility by tariff program, and evaluate potential recovery opportunities before filing through ACE.

Frequently Asked Questions

Can I claim drawback on Section 301 China tariffs?

Yes. Section 301 duties are eligible for drawback under 19 U.S.C. 1313. Importers can recover up to 99% of eligible duties when the imported goods, or commercially interchangeable substitutes, are exported or destroyed within five years, and all CBP filing requirements are met. 

Why can't I get drawback on Section 232 steel and aluminum duties?

Section 232 duties are specifically excluded from drawback. Even if the imported product otherwise qualifies, the Section 232 portion of the duty cannot be recovered. Including those duties in a drawback claim can result in denial and additional CBP scrutiny. 

How long do I have to file a drawback claim?

Most drawback claims must be filed within five years of the import date, and the qualifying export or destruction must also occur within that five-year period. Once the deadline passes, the opportunity to recover those duties is generally lost. 

How are drawback claims filed today?

All drawback claims are filed electronically through CBP's Automated Commercial Environment (ACE). Importers can file through a licensed customs broker, a service bureau, or their own direct ACE connection, with supporting documents submitted through the Document Image System. 

How long do I need to keep drawback records?

Keep drawback records for three years after the claim is liquidated, not three years after receiving the refund. Because liquidation often occurs well after payment, businesses should expect to retain documentation for longer than they initially anticipate.