Indirect Tariff Payers May Be Overlooking a Meaningful Recovery Opportunity

When tariffs rise, most companies understand the immediate impact. Costs increase, margins tighten, and those increases move through the supply chain. What many organizations are still working through is what happens when those tariffs are later invalidated.

Following the Supreme Court decision striking down certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA), a large-scale refund process is now underway. For importers of record and licensed brokers, an administrative mechanism administered by Customs and Border Protection (CBP) is available to claim  IEEPA tariff refund payments. For everyone else, there is no regulatory process in place through which to submit refund claims.  Yet the majority of affected companies who have indirectly paid tariffs fall into that second category.

The Hidden Reality of Tariff Economics

Tariffs are assessed at the border, but they rarely stay there.

Across supply chains, duties are commonly incorporated into pricing and passed downstream. Manufacturers build tariffs into product costs. Distributors factor them into resale pricing. Contractors embed them in project bids.

Industries such as construction offer a clear illustration. Tariffs on steel, aluminum, and equipment were frequently locked into contracts before projects even began, meaning downstream companies absorbed the cost regardless of who filed the import entry. This creates a familiar but often overlooked dynamic. Importers of record (who pay the tariffs upon entry at the border) are  not always the party who ultimately bore the economic burden.

A Refund Process Built for Importers

The current IEEPA refund process is designed around the importer of record. Refunds are not automatic. Eligible parties must proactively submit claims through CBP’s Automated Commercial Environment, validate entry-level data, and navigate a system that requires precise documentation. Estimates suggest that approximately $166 billion in IEEPA duties are subject to refund, underscoring both the scale of the opportunity and the complexity of the process.

From a regulatory perspective, this structure is logical. Customs duties are assessed at the point of import, so the importer is the recognized claimant. From a business perspective, it introduces friction because the companies that ultimately bore the cost may sit several layers removed from the filing entity.

For example, FedEx and other large transportation companies plan to issue refunds for IEEPA tariffs to shippers and customers once the company receives its refunds. However, that likely will not be the case among the majority of suppliers.

The Indirect Payer Gap

For indirect payers, the challenge is not eligibility in the traditional sense. It is visibility and positioning. Most organizations can identify that tariff costs affected their pricing, margin, or project economics. Fewer can clearly trace how those costs were passed through, documented, and allocated across contracts and financial statements.

That gap matters. Without a clear understanding of where tariff costs landed, companies cannot determine whether recovery is possible. And without a defined position, discussions with suppliers often stall before they begin.

Where Recovery May Exist

Indirect recovery does not follow a single path.

Instead, it depends on a combination of contract terms, supply chain relationships, and how tariff costs were treated at the time they were incurred.

In practice, this often comes down to a few critical questions:

• Did suppliers explicitly pass tariffs through to customers?
• Do contracts address tariff changes, adjustments, estimated duties, credits or refunds?
• Are suppliers pursuing refunds, and if so, how are they treating the proceeds?
• Is there documentation linking tariff costs to pricing or cost of goods sold?

In many cases, the recovery conversation is less about filing a legal or contractual claim and more about negotiating an outcome. Organizations that can substantiate their position and clearly articulate how tariff costs were absorbed are far better positioned to pursue reimbursement or cost-sharing arrangements.

Beyond Cash Recovery: The Broader Financial Impact

Pursuing tariff recovery is not just a commercial exercise. It also carries tax, financial and accounting implications. Refunds tied to previously deducted costs may trigger taxable income under the tax benefit rule, depending on how those costs were treated in prior periods.

Additionally, refund claims can reopen historical entries for review, creating potential exposure related to classification, valuation, or country-of-origin determinations. For many companies, this elevates tariff recovery from a tactical opportunity to a cross-functional initiative involving tax, accounting, procurement, and legal teams.

Why Timing Matters

The current refund process is active but not static. Claims must be submitted within defined parameters, and the process itself continues to evolve as CBP refines systems and addresses operational challenges. At the same time, broader uncertainty remains. Ongoing legal developments and policy changes could affect both the scope and timing of refunds. Our goal is to help clients move from uncertainty to action by connecting the financial, legal, contractual, and operational pieces of the problem.

How CBIZ Helps Indirect Payers Act With Confidence

For indirect payers, the work begins with understanding where tariff costs landed and what options exist to recover them. CBIZ  assists clients across the supply chain in an effort to help identify and support potential recovery options.  We coordinate across stakeholders, including customs brokers, finance teams, and legal advisors to:

• Identify tariff pass-through exposure across suppliers, contracts, and pricing structures
• Review and validate data to support  legal or contractual claims
• Support supplier engagement and negotiation strategies
• Assess tax and accounting implications of potential recoveries and refunds

As refunds begin to flow, the question is no longer who filed the entry. It is who ultimately absorbed the cost, and what can be done about it. Companies that take the time to analyze their position, engage suppliers, and build a clear recovery strategy are far more likely to capture value. Those that do not may leave meaningful dollars on the table. Contact our Integrated Tariff Solution Team to assess your indirect tariff exposure.