For years, fashion brands treated tariffs the way most people treat airline baggage fees: annoying, unavoidable, and somehow worse every time you look. Then somebody in the room said, “Wait. Are we sure all of this money is gone forever?” And just like that, the industry discovered a new obsession: tariff rebates.
Not in a glamorous way, of course. No one is posting “Duty Drawback Era” on Instagram with a matcha in hand. But behind the scenes, fashion brands, wholesalers, distributors, and retailers are taking a much harder look at whether some of that tariff spend can actually be recovered.
Because when margins are thin, inventory is seasonal, and supply chains already have enough drama to qualify for their own streaming series, “maybe we can get some of that money back” becomes a very attractive sentence.
First, a quick translation: what people mean by “tariff rebates”
In practical terms, most of the conversation falls into two buckets. The first is duty drawback. This is not new, not exotic, and not a loophole discovered by someone with a very aggressive PowerPoint. It is a longstanding U.S. Customs programme that allows companies to recover up to 99% of certain duties, taxes, and fees if imported goods are later exported or destroyed, including in some manufacturing scenarios. CBP defines drawback as a refund of certain import duties and fees, and Commerce explains it as a tool for exporters and importers to recover qualifying duties.
The second is the much newer IEEPA refund saga, which is less “customs optimisation” and more “everyone suddenly calling their trade lawyer at once.” In February 2026, the White House ended the additional IEEPA duties, and Reuters later reported that CBP had collected about $166 billion under those tariffs and still had around 20.1 million unliquidated entries tied to them as of March 4.
So yes, there is real money in play. Enough money to make even the least enthusiastic finance executive sit up straighter.
What fashion companies are actually doing
The industry response is not one thing. It is several things happening at once, usually with a customs broker, outside counsel, and someone from finance quietly asking, “Why didn’t we do this two years ago?”
1. They are pursuing refunds through the courts and trade groups
This part is very real. AAFA publicly welcomed the Supreme Court opinion invalidating the use of IEEPA for those tariffs and said refunds of the incorrectly collected tariffs should follow. USFIA likewise applauded the Court of International Trade decision directing CBP to refund IEEPA tariffs and called for a quick, efficient, automatic process.
Retail Dive also reported that brands including On, Allbirds, Skechers, Sol de Janeiro, and L’Oréal have filed their own refund suits tied to IEEPA tariffs. That tells you something important: this is no longer a theoretical trade-policy debate. Brands are treating tariff recovery as a working-capital issue.
2. They are using drawback where the facts support it
For companies that import goods or materials and later export finished goods, re-export merchandise, or destroy unsold inventory, drawback is suddenly looking a lot less like customs trivia and a lot more like missed EBITDA. AAFA’s own apparel-and-footwear drawback webinar page calls duty drawback a “game-changing cost mitigation strategy” and says an estimated 70% of eligible refunds go unclaimed.
That is a remarkable number. It means the real problem is not just tariffs. It is that many companies have never built the data, process, or governance needed to recover them. In other words, the fashion industry may have been leaving money on the table for years because nobody wanted to become best friends with entry data, export records, and destruction certificates.
3. They are restructuring distribution to reduce future duty pain
Some brands are not waiting for refunds. They are redesigning operations. Vogue reported that brands including Lisa Yang, With Jéan, Cou Cou, and Knix have moved toward U.S. distribution strategies to reduce tariff friction and improve customer experience. It also reported a sharp rise in interest in bonded warehouses, which allow merchandise to sit in the U.S. without tariffs being paid until the goods are withdrawn for consumption.
That matters because fashion rarely has the luxury of sitting still. If you cannot recover yesterday’s tariffs quickly, you work on not overpaying tomorrow’s.
4. They are exploring customs measures like bonded warehousing and tariff engineering
Footwear and fashion firms have also been looking at more technical customs strategies. WWD reported that footwear companies were weighing tools such as drawback and bonded warehousing, as well as supply-chain changes, to mitigate tariff exposure.
This is where the story gets very fashion-industry-specific. Apparel, footwear, accessories, and seasonal goods are uniquely exposed to duty volatility because they often combine high import dependency, tight margins, and trend-driven inventory clocks. A product that sits too long is not just expensive. It becomes emotionally expensive.
Who is most likely to pursue tariff rebates
The strongest candidates are usually not random importers with a pile of invoices and optimism. They tend to be companies with one or more of these profiles:
brands or wholesalers that re-export goods
companies importing materials that end up in exported finished products
retailers or distributors with meaningful inventory destruction
operators using bonded warehouses or complex cross-border distribution
businesses with enough volume that the refund opportunity justifies the compliance work
Fashion wholesalers, distributors, and global brands are especially likely candidates because their goods move through more channels, more countries, and more inventory outcomes than the average straightforward importer.
If your business imports, stores, transfers, re-exports, destroys, liquidates, and occasionally wonders where half the cartons went, congratulations: you may be living in a tariff-recovery use case.
How they are pursuing it
The common playbook appears to be four-part.
First, companies are auditing entries and HTS exposure. They want to know exactly what tariffs were paid, on which SKUs, from which countries, and under which legal authority. For IEEPA recovery, advisors are specifically pointing importers to ACE entry-summary reporting to identify the affected tariff codes.
Second, they are matching import activity to export, destruction, or substitution facts. This is the unglamorous middle chapter where a lot of refund dreams go to die. Drawback is real, but it is documentation-hungry.
Third, they are working through brokers, drawback specialists, and counsel. That is not because fashion companies suddenly became less confident. It is because customs law has a special gift for humbling smart people.
Fourth, they are changing future operating models. Bonded warehousing, revised sourcing, U.S. distribution, and customs planning are all part of the same broader trend: turning tariff management from a year-end surprise into an operating discipline.
So what is the likelihood of success?
Here is the honest answer, without the fake suspense.
Traditional drawback: good odds, if the plumbing is real
If the claim fits the law and the company can prove the chain of events, drawback has the best odds because it is a mature, official process. CBP and Commerce both describe it clearly, and CBP’s rules explicitly support refunds up to the statutory limits. The catch is not legal theory. It is operational discipline.
A company that can tie import records to exports or destruction, maintain product-level or commercially interchangeable matching logic, and file correctly has a credible path. A company whose data strategy is “ask Steve in logistics if he remembers” has a more exciting path, but not a better one.
IEEPA refunds: legally stronger than before, operationally slower than everyone wants
The legal posture has improved meaningfully for importers. The White House ended the duties, fashion trade groups are explicitly calling for refunds, and courts have moved the refund issue forward.
But success here depends not only on the legal merits, but also on how CBP operationalises refunds at scale. Reuters’ reporting on the 20.1 million unliquidated entries is the giant flashing sign that says: even if the money should come back, it may not come back neatly. So, the likelihood of eventual recovery appears meaningful. The likelihood of a quick, elegant, no-headaches process appears lower.
Casual “maybe we qualify” efforts: low
If a fashion company has never built a drawback-ready compliance foundation, the probability of successful recovery drops fast. That does not mean there is no opportunity. It means the opportunity may belong first to the companies that invested in data discipline before they needed it. Which, in a way, is the whole moral of modern supply chain strategy.
The interesting twist in this story
The funniest part of tariff rebates is that they are not really about tariffs. They are about data maturity.
The winners here are not just the companies with the best lawyers. They are the ones that know: what came in, when it came in, what duty it paid, where it went, whether it was sold, exported, transferred, destroyed, substituted, or parked in bond, and which documents prove it.
That is not a customs story. That is a systems story. It is a story about whether a fashion company has connected import data, inventory data, order data, warehouse data, product data, and financial data well enough to turn “we think we overpaid” into “here is the claim.”
And that is why this matters well beyond trade compliance. Because once tariffs get painful enough, the industry stops asking whether connected operational data is nice to have. It starts asking how many millions it is worth.
Final thought
Fashion did not wake up one day and decide customs optimisation was chic. Tariffs made it chic.
Now the industry is doing what it always does under pressure: adapting fast, improvising strategically, and trying to look composed while reading government guidance that appears to have been written by a committee of staplers.
Some brands will sue. Some will file drawback claims. Some will move into bonded warehouses. Some will rework sourcing and distribution. The smartest will do several of those things at once.
But the big takeaway is simple: tariff rebates are real, but they do not reward vibes. They reward proof. And in fashion, proof increasingly lives in the quality of your data, the discipline of your processes, and whether your supply chain can produce answers before finance starts using the phrase “margin emergency.”