CUSMA Compliance: How Canadian Exporters Ship Tariff-Free

Your Canadian-made product just got hit with a 35% tariff at the US border. The shipment qualifies for duty-free entry under CUSMA, but nobody filed the certification of origin. That 35% comes straight out of your margin.

This is happening to Canadian businesses right now. Before 2025, many shipments cleared at low or zero MFN duty even when no CUSMA claim was filed. The tariff rules changed in 2025. If you ship to the United States, CUSMA compliance is now a cost-control requirement.

What CUSMA Actually Protects You From

The Canada-United States-Mexico Agreement (CUSMA) replaced NAFTA in 2020. For most Canadian exporters, the agreement meant business as usual. Tariff rates stayed low, and many never bothered with formal certification.

That changed in 2025 when the US imposed IEEPA tariffs on Canadian goods and later raised the general rate. As of February 8, 2026, non-CUSMA goods face these IEEPA rates.

Use this table for IEEPA-only rates.

Steel and aluminum are in a separate Section 232 tariff regime.

CUSMA still matters. The Trade Commissioner Service says the agreement provides duty-free treatment on over 98% of tariff lines. The same guide says it covers over 99.9% of Canada-US bilateral trade when rules are met and preference is claimed.

The weak point is execution. If certification is missing or the importer does not claim the preference, customs treats the shipment as non-originating. For full tariff-rate context, see our US tariffs on Canadian goods in 2026.

• Source: Government of Canada's tariff response page.
• Source: Trade Commissioner Service CUSMA guide.

!CUSMA tariff comparison for preference claims.

The Four Ways Your Product Can Qualify

CUSMA rules of origin determine whether your goods are "originating" in North America. Your product needs to meet one of four criteria under Article 4.2.

• Source: CUSMA Chapter 4 text.

Wholly obtained or produced. The good is entirely sourced and made within Canada, the US, or Mexico. Minerals you extract, crops you harvest, fish you catch, goods manufactured entirely from domestic materials. This is the simplest path.

Tariff shift. You use non-originating materials, but your manufacturing process transforms them enough that the finished product falls under a different tariff classification (HS code). Each product has its own rule in Annex 4-B. For example, imported flour transformed into cookies changes HS codes, which satisfies the tariff shift.

Produced entirely from originating materials. Every component and material in your product already qualifies as originating from a CUSMA country.

Regional value content (RVC). Your product meets a minimum percentage of North American content. This is where the math matters.

How to Calculate Regional Value Content

When your product-specific rule requires RVC, you have two calculation methods:

Transaction value method: RVC = ((TV - VNM) / TV) x 100. Take your product's transaction value, subtract the value of non-originating materials, divide by the transaction value. You need 60% or higher to qualify.

Net cost method: RVC = ((NC - VNM) / NC) x 100. Net cost strips out royalties, marketing, shipping, and non-allowable interest. Because the denominator is smaller, the threshold is lower: 50%.

RVC thresholds are product-specific. Common thresholds are 60% under transaction value or 50% under net cost. Some sectors, including automotive, have higher thresholds in Annex 4-B.

Pick the method that works in your favour. If your marketing and shipping costs are high, the net cost method may give you a better ratio.

One more tool: the de minimis rule. If your product almost meets the tariff shift requirement but falls short, non-originating materials can represent up to 10% of the transaction value and you still qualify.

The 9 Data Elements on Your Certification

CUSMA replaced NAFTA's rigid Form B232 with a flexible format. You can put the certification on an invoice, a standalone document, or submit it electronically. The catch is that it must contain 9 specific data elements:

• Source: CBSA CUSMA certification of origin data elements.

1. Certifier role. Exporter, producer, or importer.
2. Certifier details. Name, title, address (must be in CUSMA territory), phone, email.
3. Exporter details. If different from the certifier.
4. Producer details. Can list "Various" or "Available upon request."
5. Importer details. Can list "Unknown" if you don't have them.
6. Product description and HS code. Use the 6-digit Harmonized System classification.
7. Origin criterion. Which of the four qualifying criteria your product meets.
8. Blanket period. If covering multiple identical shipments, specify the period (maximum 12 months).
9. Signature and date. Plus a required certification statement accepting responsibility.

Three parties can sign the certification: the exporter, the producer, or the importer. Under NAFTA, only exporters and producers could certify. The importer option is new and useful when you have better visibility into the supply chain from the import side.

For low-value shipments, certification may be waived depending on the importing country's threshold. CUSMA Article 5.5 sets a baseline threshold of US$1,000. It also allows each importing country to set a higher amount.

• Source: CUSMA Chapter 5 text.

If you ship the same product repeatedly, use a blanket certification. It covers up to 12 months of identical shipments. Renew it annually.

Cumulation: Use Content from All Three Countries

CUSMA's cumulation provision is one of its strongest features. Materials and production from Canada, the US, and Mexico all count as originating content when calculating RVC.

A Canadian manufacturer can use US-made components and Mexican-assembled sub-parts. All of it counts toward originating content. Production done in any CUSMA country contributes to the final product's originating status, even if that production alone wouldn't qualify.

This matters most for products with complex supply chains spanning North America. Check whether your suppliers in the US or Mexico already qualify under CUSMA. Their originating content rolls into yours.

Risks and Common Mistakes That Void CUSMA Eligibility

The most expensive mistake is assuming CUSMA preference applies automatically.

These are the errors that cost Canadian exporters the most. The list is grounded in CUSMA Chapter 5 origin procedures and Trade Commissioner Service guidance.

• Source: CUSMA Chapter 5 origin procedures.
• Source: Trade Commissioner Service CUSMA guide.

1. Not claiming the preference. CUSMA relief is not automatic. The importer must claim it using a valid certification of origin. If no claim is made, customs applies the non-preferential tariff treatment.

2. Wrong HS code. Your tariff classification drives which product-specific rule applies. A wrong code means the wrong rule, which can flip a compliant product to non-compliant. Get your HS classification right before anything else.

3. Incomplete certification. Missing even one of the 9 data elements invalidates the document. The most common gaps: missing origin criterion, missing HS code at the 6-digit level, and unsigned certifications.

4. Not verifying suppliers. Your finished product is only as originating as your materials. If your supplier claims their components are originating but can't prove it, your certification is built on bad data. Ask suppliers for written declarations.

5. Skipping record-keeping. CUSMA requires a minimum 5-year retention period for importers, exporters, and producers. The Trade Commissioner Service tells Canadian exporters to keep origin records for at least 6 years after export. If you cannot provide records during verification, preferential treatment can be denied and duties can be reassessed.

What Happens in a Customs Verification

The importing customs authority can verify a claim through written requests, questionnaires, and site visits.

CUSMA Article 5.9 requires at least 30 days to respond to written verification requests and at least 30 days written notice before a site visit.

If verification fails, preferential tariff treatment is denied and back duties are owed. For imports into Canada, CBSA may also apply AMPS penalties for false information.

One protection exists for exporters and producers. CUSMA Article 5.6 says no Party shall impose penalties when you voluntarily notify affected parties that your certification contains incorrect information.

• Source: CUSMA Chapter 5 verification procedures.
• Source: CBSA AMPS contravention C348.

The July 2026 Review and What It Means

CUSMA's first joint review happens on the sixth anniversary of entry into force under Article 34.7. The Global Affairs Canada implementation page confirms the agreement entered into force on July 1, 2020. That places the first joint review in 2026.

The timeline is often misunderstood. If all three parties do not confirm extension in 2026, CUSMA does not end immediately. Annual reviews continue and the agreement can still run until 2036.

The Trade Commissioner Service CUSMA guide recommends getting compliant now. Businesses with valid certification and importer claims can access preferential treatment now. Businesses without it are exposed to current tariff rates now.

• Source: CUSMA Chapter 34 review mechanism.
• Source: Global Affairs Canada CUSMA implementation page.
• Source: Trade Commissioner Service CUSMA guide.

Which Setup to Choose

If your operation fits one of these profiles, use this setup:

1. Recurring SKUs with stable sourcing: Use a blanket certification for up to 12 months and schedule supplier-origin checks each quarter.
2. Frequent supplier changes: Use shipment-specific certifications and get an advance ruling from US CBP before scaling volume.
3. RVC-driven products with tight margins: Run both transaction value and net cost calculations, then keep the stronger worksheet on file.
4. High-volume low-value parcel programs: Confirm current low-value thresholds and de minimis treatment with your broker before relying on certification exceptions.

Your CUSMA Compliance Checklist

!CUSMA compliance step-by-step flowchart showing 8 steps from classifying your product to filing with your shipment

Start here:

1. Classify your product. Get the correct 6-digit HS code from the CBSA Customs Tariff.
2. Look up your product-specific rule. Find it in Annex 4-B of CUSMA Chapter 4.
3. Determine your origin criterion. Wholly obtained, tariff shift, originating materials only, or RVC.
4. If RVC applies, run the calculation. Use the transaction value or net cost method. Check whether the de minimis rule (10% threshold) helps.
5. Collect supplier declarations. Confirm originating status of all input materials.
6. Complete the certification. Include all 9 data elements. Use a blanket certification for recurring shipments.
7. Set up record retention. Keep records at least 5 years under CUSMA. For Canadian exporter files, use 6 years after export.
8. Work with your customs broker. A broker can verify your certification, catch HS code errors, and prepare your files for CBP or CBSA verification requests.

US$2.5 billion in goods and services crosses the Canada-US border every day, according to the Government of Canada's tariff response page. With CUSMA compliance and a valid importer claim, your shipment can stay in preferential treatment. Without that claim, many goods face a 35% US IEEPA duty.

• Source: Government of Canada's tariff response page.

RTSI coordinates freight forwarding and customs support coordination for cross-border shipments. If you need help certifying your goods under CUSMA, get in touch.