CUSMA Tariff Preference Rules

Summary#

The CUSMA Tariff Preference Regulations are final rules that explain when goods moving between Canada, the United States and Mexico can get the tariff treatment of the country they come from under CUSMA. The regulations were registered on June 30, 2020 and published in the Canada Gazette on July 22, 2020. They come into force when section 190 of the Canada–United States–Mexico Agreement Implementation Act comes into force, or on the registration date if that happens later.

What it does#

• Defines what counts as a “minimal operation” (basic handling, packaging, dilution, collecting items into sets, and similar small steps).
• Sets rules for when goods exported from one CUSMA country can be treated as coming from another country for tariff purposes (referred to in the text as the United States Tariff or the Mexico Tariff):
  • The last significant production must have happened in the country claiming the tariff benefit (not just a minimal operation).
  • Goods should be shipped to Canada without passing through a non-CUSMA country. If they do pass through such a country, importers must, on request, show documents that prove the shipping route and that the goods stayed under customs control while transiting.
  • If shipped without a through bill of lading, importers may need to provide documentary proof of the shipping route when asked.
• Adds extra rules for certain tariff lines listed in the schedule: if those goods were produced in one CUSMA country using originating materials from another CUSMA country, they can get the tariff benefit only if they meet a specified “change in tariff classification” test in the producing country (or, in some cases, in Canada).

Who's affected#

• Importers and exporters that trade between Canada, the United States and Mexico and want to claim CUSMA tariff treatment.
• Manufacturers and suppliers that use materials from another CUSMA country and need to meet origin or classification tests.
• Customs brokers, freight carriers and logistics providers who handle documentation and shipments across borders.
• Goods in the specific tariff lines listed in the schedule, including 1701.12, 1701.13, 1701.91, 1701.99, 1702.90, 1806.10, and 2106.90.

Why it matters#

• These rules affect whether goods qualify for lower or zero tariffs under CUSMA. That can change the duties businesses pay and the final price of imported goods.
• The regulations make clear what shipping documents and customs control evidence importers must keep or produce when goods transit non-CUSMA countries.
• For businesses that mix materials from different CUSMA partners, the added classification tests in the schedule can determine whether a product keeps its preferential status. This can influence sourcing, production locations, and logistics choices.