A Fashion Brand’s Guide to Tariff Refunds, with ArentFox Schiff’s Angela Santos

Why It Matters

The uncertainty around tariff refunds and the rapid emergence of replacement duties threaten profit margins and supply‑chain stability for fashion companies, making proactive risk management essential for industry competitiveness.

Key Takeaways

• SCOTUS invalidated IEEPA tariffs, but new tariffs quickly followed
• Refund process still under development; timelines uncertain
• Brands must preserve protest rights and track data meticulously
• Diversify sourcing to mitigate future tariff shocks
• Leverage free trade agreements and tariff engineering strategies

Pulse Analysis

The Supreme Court’s February 2026 decision overturning tariffs imposed under the International Emergency Economic Powers Act was expected to bring relief to import‑dependent fashion brands, but the administration’s swift introduction of alternative duties has deepened trade uncertainty. This regulatory pivot underscores how quickly policy shifts can reshape cost structures, prompting companies to reassess their exposure to tariff risk and to monitor evolving legal interpretations that could affect future import calculations.

While the government proposes an ACE‑portal mechanism for filing refund claims, the process is still nascent, leaving importers in a limbo where the timing and accuracy of reimbursements are unproven. Legal experts stress the importance of filing formal protests and maintaining comprehensive documentation of each entry, as any lapse could jeopardize a brand’s ability to recover over‑paid duties. In this environment, data integrity becomes a competitive advantage, enabling firms to swiftly respond to audit requests and to substantiate claims in potential litigation.

Strategically, fashion companies are advised to diversify their sourcing footprints beyond a single country, leveraging lower‑tariff nations such as Vietnam, Cambodia, or other regional partners. Simultaneously, they can explore tariff engineering—adjusting product classifications—and capitalize on existing free‑trade agreements to reduce duty burdens. By embedding these tactics into supply‑chain planning, brands can build resilience against future tariff escalations and maintain pricing stability for consumers. The convergence of legal uncertainty and proactive mitigation will define the sector’s ability to navigate the next wave of trade policy changes.