When I first learned about the possibility of reclaiming import duties on steel parts, I thought it sounded too good to be true. But after going through the duty drawback 1 process with U.S. Customs and Border Protection (CBP), I realized that with the right documentation and compliance steps, our company could legally recover a significant portion of the tariffs paid. It’s not an automatic refund—you have to meet strict requirements—but the savings are well worth the effort.
Importing custom steel parts can qualify for tariff exemptions or refunds through programs like duty drawback, Foreign Trade Zones (FTZ) 2, and Temporary Importation Bonds (TIB) 3, provided the goods meet specific conditions such as being re-exported, transformed, or temporarily imported. However, exemptions under Section 232 are no longer available as of 2025.
What Is the Duty Drawback Program and How Does It Apply to Steel Parts?
The duty drawback program allows importers to recover up to 99% of duties, taxes, and fees paid on imported goods, including steel parts, that are later exported or destroyed under CBP supervision. This program is particularly valuable for manufacturers or resellers who ship products internationally.
How Duty Drawback Works
- You import steel parts and pay duties (including Section 232, AD/CVD, and base tariffs).
- If those parts are exported or incorporated into exported goods, you may claim a refund.
- Claims must be submitted to CBP within five years of the import date.
Eligible Scenarios
| Scenario | Drawback Eligible? | Notes |
|---|---|---|
| Steel parts re-exported unchanged | Yes | Must not enter U.S. commerce |
| Steel used in manufacturing for export | Yes | Requires documentation of transformation |
| Steel destroyed under CBP supervision | Yes | Proof of destruction required |
| Steel used in domestic products | No | Not eligible unless product is re-exported |
Are Section 232 Tariffs on Steel Eligible for Refunds or Exemptions?
Yes, Section 232 tariffs are eligible for duty drawback refunds 4 if the steel parts are re-exported or destroyed under CBP supervision, but they are no longer exemptible through product exclusion requests as of 2025.
Previously, businesses could submit exclusion requests to avoid paying Section 232 tariffs on qualifying steel products. That process has now ended, making the duty drawback route one of the only options for recouping these duties.
Summary Table
| Tariff Type | Refund via Drawback | Exemption Available | Notes |
|---|---|---|---|
| Section 232 Tariff | Yes | No | Refundable only if re-exported or destroyed |
| Base HTS Duty | Yes | Yes (via HTS/FTA) | Depends on HTS classification or FTA status |
| AD/CVD | Yes | No | Requires strict documentation |
How Can Exporters Reclaim Up to 99% of Paid Duties on Re-exported Goods?
Exporters can reclaim up to 99% of paid duties by filing a duty drawback claim 5 with CBP for steel parts that are re-exported without entering U.S. commerce or used in goods that are later exported.
Steps to Claim a Duty Drawback
- Track Each Import: Maintain a record of all import entries and paid duties.
- Link to Export Transactions: Match export shipments to corresponding imports using serial numbers or batch tracking.
- File Drawback Claim with CBP: Submit CBP Form 7551 electronically via ACE.
- Provide Supporting Evidence: Include commercial invoices, shipping documentation, and proof of export or destruction.
- Submit Within 5 Years: Claims must be filed within five years from the import date.
Types of Duty Drawback
| Type | Use Case |
|---|---|
| Unused Merchandise | Item re-exported without being used |
| Manufacturing Drawback | Imported part used in product that's exported |
| Rejected Merchandise | Damaged or nonconforming product exported or destroyed |
What Documentation Is Required to File a Duty Drawback Claim with CBP?
To successfully file a duty drawback claim with U.S. Customs, businesses must provide a comprehensive set of documents that verify importation, payment of duties, exportation, and compliance with the program’s conditions.
Required Documents
- CBP Form 7551: Official drawback claim form.
- CBP Form 7552: Certificate of delivery (if merchandise transferred).
- Proof of Export: Bill of lading, airway bill, or customs export declaration.
- Commercial Invoices: For both import and export transactions.
- Import Entry Summaries: CBP Form 7501 showing paid duties.
- Manufacturing Records (if applicable): To show usage in exported products.
Best Practices
| Requirement | Recommendation |
|---|---|
| Accurate Recordkeeping | Use software to track import/export data |
| Timely Filing | Submit within five years to avoid rejection |
| Third-party Help | Consider using drawback specialists or brokers |
| Clear Documentation | Ensure every document matches import/export data |
Conclusion
Importing custom steel parts can qualify for tariff refunds under the duty drawback program and other tools like FTZ and TIB, but exemptions under Section 232 are no longer available. With proper tracking, documentation, and strategic planning, businesses can reclaim up to 99% of duties paid on re-exported goods, significantly lowering total import costs.
Footnotes
Learn how CBP's Duty Drawback program allows recovery of up to 99% of import duties. ↩
Foreign Trade Zones offer deferral or elimination of duties for qualifying operations. ↩
Temporary import bonds let you avoid duties if goods are exported within one year. ↩
Section 232 tariffs can be refunded via drawback if products are re-exported. ↩
CBP Form 7551 is required to file a formal drawback claim for duty recovery. ↩
