Exporters are stampeding to certify their goods under North America’s free trade pact to avoid new tariffs imposed by the United States, with many wondering whether they’ll qualify or what certification even means.
Charmaine Goddeeris, director of customs and international trade at consultancy BDO Canada, says she has fielded up to 2,000 calls from exporters about certification and cross-border trade over the past two months, with a ramp-up in the past couple of weeks.
“Busy, busy,” she said. “They don’t understand the record keeping requirements.”
Companies are just “trying to save money” and avoid escalating tariffs, said Lisa McEwan, co-owner of customs brokerage Hemisphere Freight, less than 24 hours after U.S. President Donald Trump unveiled his country-by-country list of levies last week.
Despite being exempted from those so-called reciprocal tariffs, Canada and Mexico still face 25 per cent duties on most products that fail to comply with the United States-Mexico-Canada Agreement (USMCA, also known as CUSMA).
To be exempted, an importer must make a customs declaration that their goods meet certain rules of origin — often requiring that between 50 and 75 per cent is made on this continent — with documents such as a commercial invoice to certify compliance.
With many items, the producer can draw on mainly foreign materials or ingredients to create something new, allowing it to qualify as a Canadian-made good through a “tariff shift,” which refers to a shift in the product’s classification code.
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“A Canadian pasta-maker that sources ground quinoa flour from Bolivia, for example, can trigger a tariff shift by making the quinoa flour into noodles, a completely new product,” according to an Export Development Canada post from 2017. “Under the rules of origin within the free trade agreement, the pasta-maker won’t have to pay tariffs.”
Sometimes, a combination of regional content thresholds and product transformations are in play at the same time.
While the White House estimates that only 38 per cent of imports from Canada claimed a USMCA exemption last year, experts say the proportion of compliant cargo could easily breach the halfway mark, since companies enjoying effectively free trade had little incentive to certify their wares until now.
“A lot of potentially CUSMA-compliant goods that are manufactured in Canada don’t certify as CUSMA because they didn’t need to,” said Jesse Goldman, chair of the international trade group at Osler, Hoskin and Harcourt LLP, pointing to U.S. “most-favoured nation” (MFN) tariff rates that were next to nil.
“Why go to the trouble of providing all this information, keeping the records and documents, potentially subjecting ourselves to a verification audit from U.S. customs authorities when we can just sell the good on an MFN basis, which also has a zero rate of duty?”
A “significant majority” of Canadian exports to the U.S. could be USMCA-compliant, Goldman said — but not all.
Companies in aerospace, telecommunications, medical manufacturing and pharmaceuticals could struggle to meet origin rules, given their reliance on European and Asian supply chains and highly technical production.
Steel and aluminum imports to the U.S. from Canada, which have faced tariffs since March 12, enjoy no reprieve under the USMCA.
Since last week, auto imports from across the globe have also been subject to U.S. tariffs of 25 per cent — Canada imposed reciprocal vehicle duties Thursday, on top of tariffs on $60 billion worth of goods previously — but the White House has said they will only apply to the value of non-American content brought over the border under the USMCA.
What constitutes American-made components in a complex, highly integrated supply chain remains unclear.
© 2025 The Canadian Press
Canada’s exporters rush to be CUSMA-compliant, but how hard is it?
