Turning Tariffs into Opportunity: How VAT Reclaim Can Offset Rising Costs for Global Manufacturers

May 4, 2025

In April 2025, President Donald Trump announced a sweeping 25% tariff on European Union (EU) goods entering the United States. This aggressive move—part of his “reciprocal tariff” initiative—was designed to protect U.S. manufacturers and rebalance trade relationships (Business Insider). But it has sent ripples through global supply chains, triggering a fresh wave of uncertainty for exporters, logistics planners, and finance teams alike.

And the impact? It’s not just European companies feeling the squeeze. Non-EU businesses, like manufacturers in China, India, and Southeast Asia that route products through Europe, are also caught in the middle—facing higher costs, delays, and exposure to VAT they often don’t recover.

The Cost of Tariffs: What Businesses Are Facing

Let’s break down the pain points:

Profit margin pressure: A 25% tariff on imported goods is often too steep to absorb without raising prices—or cutting costs elsewhere.
Disrupted supply chains: U.S. companies are pushing foreign suppliers to handle customs and tariffs, shifting the burden upstream.
Strategic reshuffling: Some firms are looking to reallocate production, relocate assembly lines, or split shipments to minimize duties.
Double exposure: Non-EU goods stopping over in Europe (e.g., China → Germany → U.S.) may incur EU import VAT before facing U.S. tariffs—a costly combination if VAT isn’t reclaimed.

In short, tariffs are raising the stakes for everyone involved in transatlantic trade.

VAT Reclaim: An Overlooked Source of Relief

While tariffs are essentially unavoidable, Value-Added Tax (VAT) is often recoverable—yet many businesses don’t reclaim it.

Here’s why reclaiming import VAT is becoming critical:

It offsets tariff-related costs—which are non-recoverable.
It improves cash flow—important as costs rise and supply chains get longer.

It’s often low-effort with the right data and partner.

How it works:

Businesses that pay VAT in a foreign country (like for trade fairs, local marketing, logistics, or temporary warehousing) can often reclaim that tax through official EU mechanisms or by registering and filing returns in the country of import.

For non-EU businesses (like from the U.S. or China), this is especially important—yet awareness remains low. Without a reclaim strategy, this money simply goes unrecovered.

Real Supply Chain Example: When Goods Transit Europe

Imagine a Chinese electronics company exporting to the U.S. It routes a shipment through Rotterdam for repackaging and onward shipment.

At EU entry, the goods may incur import VAT—depending on who owns them and how they’re cleared.
The U.S. buyer will later pay a 25% Trump tariff on arrival.
If no one reclaims the EU VAT, that’s double taxation—and avoidable.

Now multiply that scenario across dozens of shipments per year.

Case Studies: Real-World Impact

Recent data highlights the substantial VAT reclaim opportunities available to global manufacturers navigating tariff-related challenges. A leading global data storage company was able to identify $1.4 million in reclaimable VAT from cross-border operational expenses, such as logistics, trade events, and international service fees. Similarly, the largest global supplier of food and beverages uncovered a potential $4.5 million in VAT recovery tied to its EU-based supply chain and distribution activities. These figures demonstrate the scale of unclaimed funds that can be leveraged to soften the financial impact of rising tariffs, customs complexity, and supply chain restructuring.

Why Now?

Tariffs won’t disappear overnight. And with retaliatory measures from the EU delayed but not canceled, businesses need to prepare. VAT reclaim is one of the few tools that can put cash back in your pocket without restructuring your entire operation.

It’s also:

A low-hanging fruit—especially for domestic claims that go unfiled.
A scalable opportunity—from one-off events to full-blown cross-border reclaim strategies.
Easier than ever—Way2VAT automates the heavy lifting, with minimal input from your team.

Bottom Line

Whether you’re a European manufacturer, a U.S. buyer with EU supply routes, or an Asian exporter routing goods through Europe—reclaiming import VAT could be the key to managing tariff-induced costs.

Whether you’re a European manufacturer, a U.S. buyer with EU supply routes, or an Asian exporter routing goods through Europe—reclaiming import VAT is one of the few tools available today to soften the blow of Trump’s tariff regime.

While it’s true that VAT reclaim won’t completely offset the cost of tariffs themselves, the money recovered can go a long way in offsetting unexpected costs companies are now facing—like supply chain restructuring, customs handling, and tax advisory services. These indirect costs are mounting quickly, and any liquidity boost can make a strategic difference.

Don’t leave money on the table. Make VAT reclaim part of your broader tariff resilience strategy.

Sources

Business Insider – Trump’s ‘Liberation Day’ tariffs: what the U.S. imports most from the EU
https://www.businessinsider.com/trump-liberation-day-tariffs-what-us-imports-most-from-countries-2025-4
AP News – EU pauses tariff retaliation after U.S. move to ease trade rules
https://apnews.com/article/ad6cde9920b6336789b9e2e9935c69fb
Wall Street Journal – How Trump’s trade war played out at breakneck speed
https://www.wsj.com/politics/policy/how-trumps-trade-war-played-out-at-breakneck-speed-d9c147b8
Business Insider – Howard Lutnick: EU deserves tariffs for not buying American beef
https://www.businessinsider.com/howard-lutnick-eu-deserves-tariffs-not-buying-america-beautiful-beef-2025-4
European Commission – VAT Refunds and Directive Information
https://taxation-customs.ec.europa.eu/taxation/vat/vat-directive/vat-refunds_en
Concur (SAP) – How to Simplify Your VAT Reclaim Program
https://www.concur.com/blog/article/how-to-simplify-your-vat-reclaim-program
Reuters – U.S. starts collecting Trump’s new 10% tariff, smashing global trade norms
https://www.reuters.com/markets/us-starts-collecting-trumps-new-10-tariff-smashing-global-trade-norms-2025-04-05