by David Zaiken

This is Part 2 of a three-part series on U.S. tariffs, refund strategies, and tax planning opportunities. Originally published in full on Bloomberg Tax, this series was authored by David Zaiken, Tax Director of Consulting at WebsterRogers LLP, alongside partners John Scannapieco and Alan Enslen of Womble Bond Dickinson (US) LLP, and Professor William VanDenburgh, PhD., of the College of Charleston.

The Supreme Court’s February 2026 ruling invalidating IEEPA tariffs did not end the tariff era for U.S. importers; it restarted it under new authority. With Section 301, Section 232, and Section 122 tariffs all in various stages of litigation, expansion, and potential reinstatement, businesses that import tangible property need a proactive, coordinated tariff strategy now.

The good news: there is no shortage of legitimate tools available to reduce tariff exposure, improve compliance, and protect profitability.

13 Strategies Worth Examining

Below is a practical review of thirteen strategies worth examining for your business. Download the infographic for reference.

1.  Know Who Your Importer of Record Is

The Importer of Record (IOR) bears full legal responsibility for all aspects of an importation — documentation, duty payment, and liability for any violations. Even when a supplier agrees to serve as the IOR, your business is not off the hook if it participates in or overlooks misconduct.

Review your contracts to confirm who holds IOR status, and establish a compliance system built on a “trust but verify” philosophy. Reviewing CBP Form 7501 entry summaries regularly is a practical first step for identifying red flags before they become serious problems.

2.  Review Contract Provisions for Price Increases and Refunds

With tariffs changing frequently — and refunds now a live possibility — your contracts need to address both realities.

On the upstream side, review whether existing agreements permit price increases tied to tariffs, and how any refunds would be allocated if tariffs are later deemed improper. On the downstream side, build in price escalation clauses tied to tariff changes, and specify how refunds would flow back to customers. Contracts that are silent on tariff refunds leave money and relationships at risk.

If you receive a supplier request for a price increase based on tariffs, require documentation and try to negotiate a fair allocation of the burden rather than accepting the increase wholesale.

3.  Audit Your HTS Codes

Incorrect Harmonized Tariff Schedule (HTS) codes are surprisingly common. Codes assigned by a freight forwarder or customs broker years ago may no longer be accurate — or may never have been. Misclassification carries civil and criminal exposure, and you can be liable even if you are not the IOR.

Obtain your ACE report from CBP, confirm that codes and rates are correct, and explore whether any goods can be legitimately reclassified under a lower-rate HTS code.

4.  Consider Tariff Engineering

Because tariff rates are HTS code dependent, modifying a product slightly, its design, materials, or manufacturing process, may allow it to be classified under a different, lower-rate code. Importing components rather than finished goods is another common approach, since the combined tariff on components is often lower than the rate on the assembled product.

Tariff engineering must be done thoughtfully and with experienced counsel, but it is a well-established and legitimate planning tool.

5.  Verify Country of Origin Reporting

Country of origin errors are increasingly common as suppliers in high-tariff countries misreport origin to reduce duty exposure. Transshipment: routing goods through a third country to obtain a lower rate is a growing enforcement focus of the Trump administration and carries criminal exposure and potential cargo forfeiture.

Make sure the country of origin in your customs documentation is accurate. If you are contemplating a supply chain shift, understand the substantial transformation rules that govern origin determinations before making any changes. Obtaining a binding ruling from CBP before restructuring is often advisable.

6.  Review Dutiable Value

Tariffs are calculated on the “transaction value” of imported goods, which is broadly defined. However, CBP permits deductions for certain costs including international freight, insurance, foreign inland freight, and certain origin costs such as port security charges, documentation fees, and logistics fees.

Before assuming your dutiable value is correct, have it reviewed by an experienced trade professional. Deductions must meet specific legal requirements. Undervaluing goods, intentionally or not, creates significant civil and criminal exposure.

7.  Address Transfer Pricing for Related Party Imports

If your U.S. entity imports goods from a related foreign manufacturer, the tariff burden will affect your intercompany transfer price. Transfer pricing for tax purposes and for customs purposes can differ, but both require documentation and, when they differ, they should be reconcilable under the first sale rule framework. Inconsistency between customs value and tax value can cost you the cost of goods sold deduction under IRC Section 1059A.

With the CAPE refund tool now active, this issue is particularly timely: if a tariff refund is received, the pricing will need to be adjusted again. Companies treating the U.S. entity as a limited risk distributor should address this quickly.

8.  Explore Foreign Trade Zones

Foreign Trade Zones (FTZs) allow goods to enter the U.S. duty-free, with tariffs deferred until the goods leave the zone and enter commerce. If the goods are re-exported, no tariff is owed at all. Manufacturing within an FTZ can also allow the applicable tariff to be based on the finished product’s classification rather than its component inputs.

Note: Section 301 tariffs are only deferred, not eliminated, under the FTZ structure. If space is unavailable at a domestic FTZ, consider warehousing in a Free Trade Zone in a neighboring country and importing to the U.S. as needed.

9.  Consider a Customs Bonded Warehouse

A customs bonded warehouse allows imported goods to be stored for up to five years without paying tariffs until the goods are withdrawn and entered into commerce. At that point, the tariff rate then in effect applies. Goods that are re-exported incur no tariff.

Limited manipulation is permitted in a bonded warehouse: sorting, cleaning, repackaging, repair, but manufacturing is not. This option is particularly useful in a volatile tariff environment where waiting for rate clarity can have real economic value.

10.  Evaluate the First Sale Rule — Before It Disappears

The First Sale Rule allows certain importers to use the price from the first sale in a chain of transactions, rather than the last, as the dutiable value, potentially reducing the tariff base. To qualify, goods must be clearly destined for the U.S., there must be two bona fide sales in the chain, and the first sale must be at arm’s length.

Act quickly: a bipartisan bill to eliminate the First Sale Rule was introduced in March 2026 by Senate Finance Committee members Bill Cassidy (R-La.) and Sheldon Whitehouse (D-R.I.), with reported support from the Trump administration. Businesses using or considering this rule should evaluate their exposure to its potential elimination.

11.  Use Duty Drawback When You Export

If your business imports goods that are subsequently exported, or used to manufacture products that are exported; duty drawback programs may allow a refund of up to 99% of the duties paid. The three most common programs cover manufacturing drawback, unused merchandise drawback, and rejected merchandise drawback. If you export at any stage of your supply chain, this is worth examining.

12.  Build Tariff Provisions Into All New Contracts

Every new upstream and downstream contract should address tariffs directly. Key provisions to consider include: who bears the tariff cost, at what threshold price increases may be triggered, how frequently increases may occur, what cap applies to any single increase, and how any tariff refunds will be allocated between the parties. Contracts that treat tariffs as a fixed cost absorbed by one party no longer reflect the realities of the current trade environment.

13.  Explore Onshoring Assembly and Manufacturing

The more production that occurs within the United States, the lower the import value exposed to tariffs. Businesses should model the economics of shifting assembly or manufacturing onshore, particularly for goods currently sourced from high-tariff countries. When combined with the tax incentives in the One Big Beautiful Bill Act discussed in Part 3 of this series, the financial case for onshoring may be more compelling than it first appears.

Where to Start

The strategies above are not mutually exclusive. Many work best in combination, and all should be modeled against your specific supply chain, margins, and risk tolerance before implementation. Given the pace of change in the current tariff environment, the worst strategy is inaction.

Part 1 of this series covers the IEEPA tariff refund process and the CAPE filing system. Part 3 addresses the significant federal and state tax planning opportunities created by the One Big Beautiful Bill Act — including bonus depreciation, R&D expensing, and SALT considerations for businesses onshoring operations.

To discuss how these strategies apply to your business, contact David Zaiken at WebsterRogers LLP.