How to Avoid Tariffs from Canada to the US: Guide to CUSMA / USMCA Agreement

What is a CUSMA Certificate?

A CUSMA / USMCA Certificate of Origin is a document exporters use to declare that their goods meet the requirements of the Canada–United States–Mexico Agreement (CUSMA), and therefore qualify for import duty and tariff-free entry into the U.S. or Mexico.

🔍 What Does It Do?

• Confirms that your goods are originating under CUSMA / USMCA rules

• Allows your U.S. or Mexican customer to avoid paying import duties or tariffs

• Must be presented to the importing customs authority to claim this benefit

🧾 Who Needs to Use It?

• Canadian businesses exporting physical products to the U.S. or Mexico

• Especially helpful for direct-to-consumer (DTC) eCommerce sellers who previously fell under the $800 de minimis rules.

🛠️ What Does It Include?

• Exporter, producer, and importer contact info

• HS codes and descriptions for each product

• The qualifying origin criterion (A, B, or C)

• Either a single shipment date or a blanket period (up to 12 months)

• Signature and certification by an authorized person

📎 Is It Mandatory?

While not legally required for export, your goods will not receive tariff-free treatment without it. As of August, 2025, the de minimis exemption for shipments valued under $800 will no longer exempt any Canadian goods from tariffs. Additionally, if the certificate is missing or inaccurate:

• Your U.S. customer may be charged import duties

• Customs may delay or reject the shipment

• You may be asked to prove your claim with additional documentation

INTRODUCTION

What does CUSMA mean?
The Canada–United States–Mexico Agreement (CUSMA), also known as USMCA (U.S.) or T-MEC (Mexico), is a free trade agreement that eliminates duties on qualifying goods traded between Canada, the U.S., and Mexico. It replaced the NorthAmerican Free Trade Agreement (NAFTA) between the US, Canada, and Mexico in 2020.

Is USMCA the Same As CUSMA?

Yes, they are two terms for the same agreement.

Why it matters to your business
If your goods qualify under CUSMA / USMCA, you can ship them to U.S. customers tariff-free, reducing their costs and improving your competitiveness.

This guide will help you:

1. Determine whether your goods qualify for tariff-free treatment under CUSMA / USMCA.

2. Fill out the required CUSMA / USMCA Certificate of Origin with confidence.

PART 1: Do Your Goods Qualify for CUSMA / USMCA?

1.1 What kinds of goods are eligible?

If you sell physical products directly to consumers in the U.S. from Canada, and are concerned about the tariffs that will levied on goods even below the $800 de minimis threshold, you should check if you qualify. Common examples include:

• Apparel & accessories

• Home goods

• Jewelry

• Wellness items

• Packaged food

1.2 How to determine eligibility

Your product qualifies if it meets one of the CUSMA / USMCA origin criteria:

1.3 What are Transformation (Tariff Shift) Rules?

Transformation rules — also called "tariff shift" rules — determine whether enough processing has occurred in North America for a product made with foreign materials to qualify under Criterion B.

In simple terms: If you transform imported components into a final product that falls under a different customs classification (HS code), then it likely qualifies.

Example 1: Canvas Backpack (HS Code 4202.92)

• You import zippers and fabric (from a different heading)

• You cut and sew the backpack in Canada

• The rule might say: “A change to heading 4202 from any other heading.”

• ✅ This qualifies because the inputs and final product are in different tariff headings

Example 2: Chocolate Bar (HS Code 1806.32)

• You import cocoa paste (in the same HS heading)

• You manufacture the chocolate in Canada

• The rule might say: “A change to heading 1806 from any other chapter.”

• ❌ This does not qualify unless the input comes from a different chapter or is already originating

Types of Rules You Might See

How to Check

1. Find your product's 6-digit HS code

2. Look it up in CUSMA Annex 4-B

3. Follow the specific transformation or value requirement

What Documentation to Keep

• HS codes for inputs and finished goods

• Proof of production steps

• Supplier invoices and manufacturing records

1.4 How much labour or local material is required?

There is no universal minimum for Canadian labour or materials. Instead, the required amount depends on the type of origin rule your product falls under. Here's how it works:

If your product has a Tariff Shift Rule:

• Labour must result in a change in the HS code between inputs and the final product.

• Basic actions like repackaging, relabeling, or sorting typically do not qualify.

✅ Qualifying work might include:

• Sewing or assembling into a new good

• Cooking or processing ingredients

• Manufacturing parts into a new product

❌ Non-qualifying work includes:

• Adding labels or tags

• Simple mixing or dilution

• Putting items in boxes

If your product has a Regional Value Content (RVC) requirement:

• A specific percentage of the product’s value must come from North American sources (typically 40–60%)

• This includes materials, labour, overhead, and profit margin

If your product has a Specific Process Rule:

• You must perform a named manufacturing step (e.g. spinning yarn, chemical reaction)

• If this step is not done in Canada, the product does not qualify

📌 In all cases, you must be able to document the origin of materials and the steps you took to process or assemble the product.

1.5 What documentation you need to keep

• Proof of where your goods were made

• Invoices for raw materials

• Bills of manufacture, production records

• HS Code research/documentation

PART 2: Filling Out the CUSMA / USMCA Certificate of Origin

Use the official CUSMA Certification of Origin PDF to claim tariff-free status. 

PART 3: Best Practices for Canadian Small Businesses

• Use a blanket period for all shipments in a year. 

• Maintain records for 5 years in case of audit.

• For shipments directly from your Canadian business to consumers in the USA, "importer" should include your customer's name and address. A tax ID is not required for individuals, only businesses.

RESOURCES & LINKS

• CUSMA / USMCA Full Agreement PDF

• CUSMA / USMCA Certificate of Origin – Fillable PDF

• HS Code Lookup Tool (Canada Post)

• CBSA CUSMA Info Page
  

• US Gov USMCA Tool To Determine Your Product's Origin Rules

Need help? Talk to a trade advisor, customs broker, or connect with the Canada Border Services Agency (CBSA) directly. You may wait on hold for some time, but the staff are extremely knowledgeable and helpful.