Small Business Tariffs: How to Handle Costs and Refunds
The Supreme Court struck down one set of tariffs, but new duties replaced them. Here is what importers should check, price and change.
The short answer: For small business tariffs in 2026, start with three jobs: check whether you paid IEEPA duties and can claim a refund, work out your current landed cost per product, and review your prices and suppliers. The Supreme Court struck down IEEPA tariffs in February, but other duties still apply.
This guide is general information, not legal or customs advice. Rates depend on the product and its origin, and they change often. Confirm yours with a licensed customs broker.
What happened to US tariffs in 2026?
In Learning Resources v. Trump, the Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize tariffs. A temporary 10% global tariff under Section 122 followed. When it expired on July 24, new Section 301 forced-labor tariffs took its place.
By the numbers:
- Average effective US tariff rate: 7.1% in August 2026, up from 2.3% in January 2025, per the Penn Wharton Budget Model.
- China: 24.3% effective rate on the same measure.
- IEEPA duties collected: about $166 billion, all subject to refund.
- Refunds certified: about $126 billion through October 2, 2026.
Which small business tariffs apply now?
| Tariff type | What it covers | What to check |
|---|---|---|
| Normal customs duty | Most imports, by product code | Your HTS classification |
| Section 301 forced-labor tariffs | 60 economies, generally 10% or 12.5% | Country of origin; the EU, Taiwan, Japan, South Korea and Switzerland have capped treatment |
| Section 232 | Sector goods such as steel and aluminum | Product list and metal content |
| Other country-specific duties | For example, Zonos lists 25% on Brazilian goods and 50% on certain Canadian goods | Latest notices for your origin countries |
Goods from Mexico that qualify under the USMCA trade agreement were reported as exempt from the Section 301 duty in one company's SEC filing. Confirm your own eligibility.
Why it matters: two similar products can carry very different duties depending on their code and origin. A blanket "tariff surcharge" can leave you overcharging on some items and losing money on others.
How do you claim an IEEPA tariff refund?
Step 1: Find out who the importer of record was
The refund process runs through the importer of record. If your supplier or courier handled customs, ask who paid and whether any refund will be passed to you. Your contract may answer this.
Step 2: List your IEEPA entries
Ask your customs broker for entries that included IEEPA duties. Refunds apply to these duties only, not to Section 232 or normal duties.
Step 3: File through CAPE
CBP built a system called CAPE to process claims. Skadden noted that importers must submit claims, and the rollout has come in phases. Check current CBP guidance for which entries are eligible now.
Step 4: Book it carefully
Do not spend a refund until it arrives. Keep it out of your base forecast and ask your accountant how to record it.
How do you calculate landed cost?
Landed cost is the full cost of getting a product to your door. Here is a hypothetical order of 100 units from a country at the 12.5% rate, ignoring normal duty:
| Item | Without new duty | With 12.5% duty |
|---|---|---|
| Goods | $10,000 | $10,000 |
| Duty | $0 | $1,250 |
| Freight and insurance | $800 | $800 |
| Broker fees | $150 | $150 |
| Total | $10,950 | $12,200 |
| Cost per unit | $109.50 | $122.00 |
| Price for a 40% gross margin | $182.50 | $203.33 |
Holding the same percentage margin means raising the price by about 11%. Absorbing the whole duty at $182.50 would cut gross margin from 40% to about 33%.
How should small businesses change prices?
- Price by product. Raise prices most where duties are highest and customers are least sensitive.
- Consider a mix. Absorb part of the cost, pass on part and ask suppliers to share part.
- Shorten quote periods. Add a clause allowing changes if duties change before delivery.
- Explain increases plainly. Do not call something a temporary tariff charge unless that is true.
Our guide on how to price your services covers the wider logic of price changes.
How do you reduce tariff risk?
Ask current suppliers about price sharing before you switch. A new country can mean new quality risks, longer lead times and different rules. Origin depends on legal rules, not simply where goods last shipped from.
Protect your cash too. Duties are generally due around import, well before you sell the goods. Our guide to cash flow management shows how to plan for that gap. If you sell online, review your ecommerce platform settings for duties and landed-cost display.
Yes, but: low-value orders are no shelter. Zonos reports that de minimis duty-free treatment remains suspended for all shipments.
What to watch: USTR's excess-capacity investigations under Section 301, which could lead to more tariffs, and continuing litigation over the expired Section 122 duties.
Example: choosing how to share a tariff cost
Return to the hypothetical order above, where duty adds $12.50 per unit. An owner could raise the price by the full amount needed to hold a 40% margin, at $203.33. Or the owner could split the problem: ask the supplier for a small discount, accept a slightly lower margin and raise the shelf price by less.
The right mix depends on how customers respond. Try a price change on a few products first, watch sales for several weeks, and use actual results instead of guesses. A product that sells on brand or service may absorb an increase better than one customers can easily compare online.
Common tariff mistakes small businesses make
- Assuming the duty is on the retail price. Duty is generally based on customs value, not on what you charge customers. Ask your broker how value is set for your goods.
- Using the wrong product code. A misclassified item can mean the wrong duty and possible penalties.
- Confusing shipping origin with country of origin. Goods passing through a third country do not automatically take on that country's rate.
- Trusting old price sheets. With rules changing repeatedly in 2026, a quote from early in the year may be out of date.
- Forgetting the supplier's position. Your terms decide who pays import costs, so check whether your prices include duty.
- Ignoring refund deadlines and procedures. Check current CBP guidance with your broker rather than waiting for money to appear.
Your tariff checklist for this quarter
- List your top 20 imported products by sales.
- Confirm the product code, origin and current duty for each.
- Calculate landed cost and gross margin per product.
- Ask your broker about IEEPA entries and refund eligibility.
- Review supplier contracts, customer quotes and delivery terms.
- Set a monthly date to check for new tariff notices.
How should you talk to customers about tariff price changes?
Give notice where you can, explain the reason in one or two honest sentences, and focus on what stays the same, such as quality and service. Business customers will often want dates and new quotes in writing, so send a short, clear update instead of letting them find out on an invoice.
Avoid promising that prices will fall if tariffs change, because the rules have moved repeatedly this year. If you receive a refund on earlier duties, check your contracts and take advice before making any statement about passing it on.
Also keep your sales team informed. Customers will ask them first, and a consistent answer builds more trust than improvised explanations. A short internal note covering the reason, the new price, the start date and who can approve exceptions is usually enough for a small company.
Finally, write down who owns tariff tracking in your business. In a small company, this is often the owner or an operations lead working with the customs broker. One named person checking notices each month will catch more than everyone assuming someone else is watching.
The bottom line: the ruling did not end tariffs. Claim what you are owed, know the duty on every product, and keep prices and contracts flexible.
Frequently asked questions
Are tariffs gone after the Supreme Court ruling?
No. The February 2026 ruling concerned tariffs imposed under IEEPA. Other duties continue, including normal customs duties and Section 232 tariffs. New Section 301 forced-labor tariffs began on July 24, 2026. Check the duties that apply to each product and country of origin, because they vary widely.
Can a small business get a tariff refund?
Possibly, if it was the importer of record and paid IEEPA duties. Refunds are not automatic, and claims run through CBP's CAPE system in phases. If a courier or supplier acted as importer, ask them about the refund. A licensed customs broker can confirm which entries are eligible.
Do tariffs apply to low-value packages?
Generally yes in the US at present. Compliance provider Zonos reports that de minimis duty-free treatment remains suspended for all shipments regardless of value or origin. The duty method can vary by carrier, so check the rules that apply to your shipments and include those costs when pricing.
Should I add a tariff surcharge?
It depends on your customers, contracts and costs. A separate surcharge is transparent, but it must be accurate and should not overstate the duty. Some businesses instead build the cost into prices. Review existing contracts first, because agreed prices may limit what you can change or add.
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