Introduction
When the U.S. Supreme Court struck down the International Emergency Economic Powers Act (IEEPA) tariffs in February 2026, it unlocked an estimated $175 billion in potential refunds. However, the refunds flow directly to the importer of record, meaning the supplier receives those funds and not the customer who paid the higher price.
After spending 2025 absorbing cost increases across hundreds of vendors, many citing tariff pressures, one national retailer recognized the massive opportunity presented by the window that the court ruling created for recovery. The retailer needed to rapidly build a dedicated process to claim its share of the funds.
To turn vague exposure into a collectible pipeline, the retailer partnered with Catalant, engaging consultant Daly Place, an expert in supply base value capture. Place built the retailer’s playbook to translate the company’s scattered transaction data into an active, cash-generating recovery program.
The Problem
Millions hidden across a complex supply base
The retailer’s supply base spanned hundreds of vendors and thousands of individual transactions that saw price increases throughout 2025.
While leaders knew the company could capture a meaningful piece of the roughly $175 billion in play nationally, there was no internal visibility into where or how much. Category managers knew about price hikes affecting their own categories, and finance saw aggregate cost pressures on margins. Yet there was no clear way to connect a specific price increase to a tariff and to the supplier’s refund eligibility.
Documentation varied across suppliers. Some vendors explicitly cited tariffs in increases, while others simply raised prices during routine renewals, leaving the tariff rationale unnamed. Without a structured way to separate tariff-driven increases from standard commodity or market-cost changes, the retailer had no defensible ground to pursue an equitable share of recoveries. Plus, suppliers are not legally required to pass refunds back, meaning that any recovery needed to be negotiated.
The Approach
A process for systematic tariff recovery
The major retailer partnered with Catalant, seeking supplier value capture expertise to build a dedicated tariff recovery system. Through Catalant, consultant Daly Place built a five-part framework to take the retailer from unverified exposure through refund collection and led supplier-facing negotiations to accelerate recovery and reconciliation.
For the retailer, Place started by screening purchasing data and price documentation across the entire supply base for parts with one or two discrete price increases after IEEPA tariffs took effect that commodity indices couldn’t explain. This included reviewing more than 300 parts for tariff-related increases, ultimately building a comprehensive inventory of candidate parts that could have been impacted by tariffs.
For each candidate part, a defensible evidence package was built by going beyond ERP systems to interview buyers and category managers who owned vendor relationships. Supplier emails, sourcing knowledge, country-of-origin details, and other non-standardized data provided contextual information to validate parts with enough evidence to build a reasonable case for recovery.
Estimated exposure was then calculated for each part to establish a baseline to be leveraged in individual supplier negotiations. Place led outreach to more than 70 suppliers, seeking joint reconciliation and recognizing that suppliers would seek to retain at least a portion of the refunds to cover filing costs, customs counsel fees, or similar expenditures. While some vendors moved straight to confirming totals and repayment mechanisms, others sought the detailed analytics or line-by-line evidence review that were built during the earlier stages of the project for verification.
Ultimately, documented alignment and signed agreements with suppliers translated to significant cash-in-hand for the retailer.
The five-step supplier recovery framework
| Step | Input | Action | Output |
|---|---|---|---|
| 01 Identify impacted products | Purchase history | Analyze price increases | Candidate parts |
| 02 Validate tariff link | Buyer and supplier evidence | Link price increase to tariffs | Evidence package |
| 03 Size opportunity | Volumes and price deltas | Calculate impact | Recovery estimate |
| 04 Engage suppliers | Recovery estimate | Negotiate reconciliation | Supplier agreement |
| 05 Realize recovery | Supplier agreement | Collect and track cash | Cash recovery |
The Results
$30M identified in collectible pipeline
This retailer moved from having zero true visibility into tariff exposure to running a fully documented supplier-by-supplier recovery pipeline. Through review of more than 300 parts, the company had a single, defensible baseline: $30 million or more in estimated exposure.
By August 2026, 65% of the total opportunity had moved under supplier agreement, with more than 20% already collected.
With a rapidly closing window on tariff fund recovery, this efficient and strategic approach to identifying the total opportunity and reconciling with suppliers alleviated the impact of tariff-induced margin pressures for the retailer.
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About the Consultant
Daly Place is a Catalant consultant and Founder of Winters Procurement, specializing in supply base value capture. A former McKinsey procurement consultant, she has delivered tens of millions of dollars in savings across direct materials, indirect spend, and professional services for companies in the consumer, industrial, and technology sectors. Daly works closely with private equity operating partners and portfolio company leaders, combining data analytics with competitive sourcing events to drive measurable P&L impact across complex, high-volume supply chains.
Importers of record receive tariff refunds directly from the government, creating no legal obligation for vendors to pass those funds back to commercial customers. Without structured evidence connecting cost surges to vendor customs filings and active negotiations, commercial buyers often do not receive refunds.
Isolating tariff impact requires cross-referencing purchasing data against commodity indices to detect unexplained price spikes. Procurement teams must go beyond ERP systems by gathering buyer emails, country-of-origin details, and sourcing documentation. Combining qualitative relationship knowledge with quantitative purchase histories builds a defensible evidence package necessary for commercial negotiations.
A five-part supplier value capture framework converts unverified cost exposure into cash by moving systematically from product identification to agreement execution. Sizing precise financial exposure before initiating vendor outreach establishes a firm baseline for negotiation. Structuring joint reconciliation offers accounts for supplier filing costs while securing repayment agreements.
ERP systems rarely document the exact rationale behind vendor price increases, leaving tariff justifications unrecorded. Interviewing category managers uncovers crucial contextual evidence, including vendor communications and informal pricing negotiations. Integrating this qualitative data with purchase history validates whether specific price increases stemmed from tariff pressures rather than standard commodity shifts.
Enterprise buyers are most likely to achieve successful reconciliations by presenting suppliers with line-by-line analytical evidence packages while offering flexible settlement terms. Vendors may challenge recovery claims until presented with detailed purchase volumes, country-of-origin data, and historical price deltas. Offering shared margin recovery terms incentivizes suppliers to confirm totals and expedite cash transfers.
