Breaking Down Section 301 Tariffs: Recovery Opportunities for US Importers

Section 301 tariffs on Chinese imports have significantly increased costs for U.S. businesses since 2018, yet they also opened substantial duty drawback opportunities many importers still overlook.

CBP data shows over $170 billion in additional duties have been collected, with $32–$41 billion potentially recoverable—but less than 14% claimed so far.

For importers that export directly, manufacture with Chinese inputs, or destroy unsellable goods, the five-year lookback window still offers meaningful refunds.

Section 301 tariffs rolled out in four major waves between July 2018 and September 2019:

These duties are fully eligible for drawback, and three characteristics make them especially valuable:

Use this four-step framework to size the opportunity:

Review import data for Chinese shipments subject to the tariffs.

Historical data shows 43–67% of Chinese imports typically fall under Section 301 coverage, though this varies by industry.

Quantify totals since July 2018:

Trade economists find Section 301 duties typically represent 4.2%–8.7% of total product cost for regular China importers.

Determine which activities qualify for drawback:

CBP benchmarks show direct exports represent 12–38% of prior imports for consumer goods; manufacturing exports can reach 20–45% where Chinese inputs feed production.

Apply the appropriate formula:

Example: A furniture retailer importing $5M annually, with 60% facing 25% Section 301 duties and 15% exported, could recover ~$111K per year or $556K over five years.

Tailor tactics by sector:

Focus on component-level tracking, analyzing exclusion opportunities, and documenting returns destruction.

Case study: a retailer recovered $842K over three years by pairing international sales data with destruction evidence for Chinese-origin products.

Track textiles through manufacturing, plan season-end exports, and document component usage in exported garments.

Optimized apparel programs are recovering $370K–$920K annually from Section 301 duties.

Map Chinese components within assemblies, track project-based exports, and attribute service parts appropriately.

Comprehensive programs recoup 23–31% of total Section 301 duty payments.

Higher refund values invite scrutiny—strengthen evidence across these areas:

Maintain entry summaries showing Section 301 tariffs, Chinese-origin invoices, payment confirmations, and HTS support.

Best practice: keep a dedicated repository for Section 301-affected entries to streamline claims.

Provide commercial interchangeability evidence, detailed specs, and matching 8-digit HTS codes for 19 U.S.C. § 1313(j)(2) claims.

Claims with comprehensive interchangeability documentation see 87% first-pass approvals vs. 54% otherwise.

Supply bills of materials, manufacturing records, and yield/waste calculations tying Chinese components to exported goods.

Detailed manufacturing documentation drives 40% higher recoveries than basic records.

Timing decisions can materially impact results:

The five-year window makes sequencing critical—List 1 entries from July 2018 expire July 2023, so prioritize oldest imports and allow time for documentation reconstruction.

Waiting until the final year cuts recoveries by ~22% due to rushed filings and missing data.

Qualifying importers can secure refunds in 3–5 weeks by meeting CBP criteria and bonding requirements—large filers report $150K–$350K in expedited refunds per quarter.

Quarterly filings balance efficiency and cash flow; prioritize high-value claims and avoid seasonal CBP bottlenecks. Consolidation can cut admin costs ~40% versus monthly submissions.

Address nuances unique to these tariffs:

Identify exclusion periods, confirm any refunds already received, and understand drawback interactions—duties already refunded cannot be reclaimed, but waived duties do not block standard drawback eligibility.

Maintain origin documentation, allocate Chinese inputs to exports accurately, and calculate the eligible value. Origin-tracking systems that flag Section 301 components maximize refunds.

Many products face both programs—distinguish tariffs, maintain separate documentation, and coordinate combined claims. Dual-tariff products offer 4.8–7.9% recovery relative to product cost.

Choose the model that matches your resources:

Requires dedicated customs expertise, technology investments, and ongoing training—typically viable when annual recovery potential exceeds $350K.

Estimates: 1.5–2 FTEs plus $50K–$75K in systems.

Leverage existing broker relationships, but recognize capabilities vary—industry surveys show recovery outcomes between 52% and 84% of maximum potential depending on specialization.

Section 301-focused providers supply targeted expertise, purpose-built tech, and contingency fees. Data shows specialists deliver 12–27% higher recoveries than general brokers and 31–46% higher than in-house programs while minimizing client time.

Move quickly before early claims expire:

With Section 301 tariffs continuing and the earliest lookback windows closing, now is the moment to capture refunds that otherwise disappear.

Contact Evana for a confidential assessment tailored to your Section 301 exposure.