MONTREAL – 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 — and others suddenly “discovering” the true origins of their shipments to duck duties.
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 under the United States-Mexico-Canada Agreement (USMCA) 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.”
Lisa McEwan, co-owner of customs brokerage Hemisphere Freight, said she’s also been bombarded by inquiries as companies try to save money and avoid escalating tariffs.
“There’s definitely a big increase,” she said, one day 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 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.
Importers in Canada, who now face retaliatory tariffs imposed by the federal government, have made some surprising discoveries about where the cargo comes from — or where they claim it’s from.
“I’ve been clearing their stuff for, like, 20 years and they’re telling me their goods have been made in the USA. And then they’re like, ‘You know what, I looked into it and they’re actually made in China,’” McEwan said of one jewelry importer, noting that Canada has low tariffs on most Chinese products.
Shippers would be wise to have their documents in order as North American border authorities scrutinize shipments under the tightened tariff regime.
“I had a pallet of office furniture pulled because they didn’t believe the steel component percentage that I put,” McEwan said.
A truckload of her client’s beauty products was also flagged at the border, prompting her to submit a full list of ingredients and prove the items’ origins, she said.
“They’re out for blood. I’ve had so many shipments stopped. They are really cracking down on paperwork right now.”
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 change in the product’s classification code.
“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 the 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.
Certifying a product’s origin under the USMCA actually amounts to “self-certification” by the producer, exporter or importer rather than a government body, Goldman said. But the importer needs to have documents on hand should authorities launch an audit.
These include a commercial invoice, product descriptions and classification numbers, and the “origin criterion” pertinent to the good under the USMCA rules of origin, according to the Canada Border Services Agency.
This report by The Canadian Press was first published April 7, 2025.
