Tariff Refunds: How to Evaluate and Respond

AGG Corporate and International partners Mike Burke and Allison Raley co-authored an article for Supply & Demand Chain Executive providing supply chain leaders with a practical framework for evaluating and responding to customer requests for tariff refunds.

As tariff policies continue to change, suppliers of imported goods are increasingly receiving requests for credits or price adjustments after duties are reduced or paused. Allison and Mike explain that these requests should not be evaluated based on commercial expectations alone, as the answer often depends on the specific terms of the parties’ agreement.

“Before responding to any refund request, the first step is always the same: pull the contract,” Allison and Mike explained, noting that pricing and cost-adjustment provisions govern whether a refund is owed.

The attorneys outline several key issues companies should evaluate, including whether pricing is fixed or cost-plus, whether the agreement contains tariff-specific provisions, who serves as the importer of record, and whether a “most favored customer” clause could affect pricing obligations. They also recommend verifying the facts behind each tariff change, tracing how pricing was established, distinguishing contractual obligations from business decisions, and carefully documenting any voluntary accommodations.

“The suppliers best positioned to navigate these conversations are those who understand their contracts, verify the underlying facts, and respond with a consistent framework rather than ad hoc decisions driven by whoever asks loudest,” Allison and Mike concluded.

To view the full article, please click here.