DEFINITION of 'Drawback'

Any form of tax or tariff that is rebated to the payor. This type of rebate is awarded to importers and exporters who paid tax on goods imported into their home country, and then exported those goods after they arrived. Drawbacks allow importers to temporarily store or use their goods in the U.S. without paying a non-refundable tax.

BREAKING DOWN 'Drawback'

The goods that are exported do not have to be in the same form as when they were imported. For example, if raw materials were imported and used to manufacture another good, then the drawback will be paid if the manufactured goods are exported.

RELATED TERMS
  1. Net Exporter

    A country or territory whose value of exported goods is higher ...
  2. Net Importer

    A country or territory whose value of imported goods is higher ...
  3. Export

    A function of international trade whereby goods produced in one ...
  4. Dollar Drain

    When a country imports more goods and services from another country ...
  5. Import And Export Prices

    Two indexes that monitor the prices of imports and exports in ...
  6. Export Incentives

    Monetary, tax or legal incentives designed to encourage businesses ...
Related Articles
  1. Investing

    Growth and Politics In Exports

    An export is a good or service that is shipped from one country to another for sale or trade.
  2. Insights

    Hidden Costs Of Product Rebates

    These cash incentives lure in consumers, who are often unable to collect on the deal.
  3. Investing

    Understanding Net Exports

    Net exports are the difference between a country’s exports and imports.
  4. Investing

    Understanding Terms of Trade

    Terms of trade measures a country’s trading efficiency.
  5. Investing

    Understanding Imports

    An import is a good or service that’s brought into one country from another.
  6. Insights

    The Basics Of Tariffs And Trade Barriers

    Everything you need to know - from the different types of tariffs to their effects on the local economy.
  7. Insights

    Interesting Facts About Imports And Exports

    Imports and exports exert a profound influence on the consumer and the economy. Learn what affects these figures, and in turn how these figures affect the economy.
  8. Investing

    Tariffs

    Tariffs, or customs duties, are taxes imposed on foreign goods and services. In addition to providing a country with additional revenue, tariffs offer protection to domestic producers. Imported ...
  9. Investing

    How Imports And Exports Affect You

    Imports are an important indicator of an economy’s health. In a healthy economy, exports and imports are both growing.
  10. Insights

    The Balance Of Trade

    The balance of trade is the difference between a country’s imports and exports. A trade deficit occurs when a country buys or imports more goods from other countries than it sells or exports. ...
RELATED FAQS
  1. What is a trade deficit and what effect will it have on the stock market?

    A trade deficit, which is also referred to as net exports, is an economic condition that occurs when a country is importing ... Read Answer >>
  2. Why do long-term care insurers require the loss of two Activities of Daily Living ...

    Find out why an importing or exporting merchant might turn to a banker's acceptance to help facilitate an international trade ... Read Answer >>
  3. How do tariffs protect domestic industries?

    Understand the four ways tariffs are used by domestic government to protect its domestic industries. Learn how tariffs are ... Read Answer >>
  4. What country is the world's largest exporter of goods?

    Learn about the rapid economic growth China has experienced in recent years and how the country grew into the world's largest ... Read Answer >>
  5. When has the United States run its largest trade deficits?

    Learn in what year the United States ran its largest negative balance of trade as a result of imports greatly exceeding the ... Read Answer >>
  6. What is a forward contract against an export?

    Understand forward exchange contracts in exporting, and learn the purpose of using a forward contract and its advantages ... Read Answer >>
Hot Definitions
  1. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  2. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  3. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  4. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  5. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
  6. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
Trading Center