CUSMA/USMCA: Maximizing Duty Savings on US Imports

What Is CUSMA?

The Canada-United States-Mexico Agreement (CUSMA) — known as the USMCA in the United States and T-MEC in Mexico — is the free trade agreement governing commerce between Canada, the US, and Mexico. It replaced NAFTA in July 2020 and provides preferential (zero or reduced) duty rates for qualifying goods traded between the three countries.

Who Benefits From CUSMA?

Any Canadian importer purchasing goods that originate in the United States or Mexico can potentially benefit from CUSMA — provided the goods meet the applicable rules of origin. Industries with the most significant savings potential include automotive, agriculture, machinery, and consumer goods.

Understanding Rules of Origin

To qualify for CUSMA preferential rates, goods must "originate" in Canada, the US, or Mexico. Origination rules vary by product and are based on criteria such as:

• Wholly obtained: The good is entirely grown, extracted, or manufactured in a CUSMA country
• Tariff shift: Non-originating inputs undergo a specified change in tariff classification during production
• Regional value content (RVC): A minimum percentage of the good's value is added within the CUSMA region

Documentation Requirements

To claim CUSMA at the time of import, you need a valid certification of origin. Under CUSMA (unlike NAFTA), there is no prescribed certificate form — instead, any document containing the required data elements is acceptable. The certification can be completed by the exporter, producer, or importer.

Importers must retain origin documentation for a minimum of five years and must be able to produce it in the event of a CBSA verification.

Common Pitfalls

Many importers either fail to claim CUSMA when they are entitled to, or claim it incorrectly and face CBSA penalties during verification. Common errors include accepting supplier certifications without verification, misunderstanding tariff shift rules, and failing to update certifications when products or suppliers change.

How Viacan Can Help

Viacan's trade compliance team conducts CUSMA eligibility assessments and documentation reviews to ensure you are capturing all available duty savings — without taking on compliance risk.