A person is seen walking in the vicinity of the Atlantic Hub container terminal in Halifax, Canada. President Donald Trump has threatened to impose new tariffs on goods from the country, despite a delay in the implementation of the 25% tariff on a wide range of products. President Trump has not completely reversed the tariffs he imposed earlier this month on most Mexican and Canadian goods imported to the United States. While he announced a tariff delay until April 2, it is not a complete suspension. To avoid tariffs during this delay, goods from Mexico and Canada must adhere to the terms of the USMCA free trade treaty signed by President Trump during his first term.
At present, only about 50% of Mexican goods and 38% of Canadian goods imported to the US comply with the terms of the USMCA, as stated by a senior administration official during a call with reporters. Apart from certain Canadian energy imports and potash, goods from these countries that do not comply with the USMCA could still face 25% tariffs or higher.
The complexity of trade is evident, with different products subject to varying duties based on factors such as weight, content, or other characteristics. With limited time to adjust before the new policy takes effect on April 2, experts and government officials are uncertain about the specific products that will be taxed. Dan Gardner, president of Trade Facilitators, Inc., expressed confusion over the administration’s decision, calling it vague and nonsensical.
In addition to the tariff situation, there are other trade policy changes to consider: 25% tariffs on steel and aluminum imports are scheduled to be enforced on March 12. Moreover, President Trump has threatened to impose a 250% tariff on Canadian dairy products and significant tariffs on lumber. He also mentioned the possibility of increasing tariffs in the future.
Ensuring compliance with the USMCA is proving to be a challenge for many companies. The lack of compliance is attributed to the fact that many goods previously did not face US tariffs and, therefore, companies did not prioritize meeting treaty requirements. Additionally, some products that technically comply may not be declared, as the savings from avoiding tariffs may not outweigh the costs and complexities associated with compliance procedures.
Overall, the evolving trade landscape presents significant challenges for businesses navigating the intricacies of trade policies and tariffs imposed by the United States government.
The materials used in these products originate from North America. Customs officials face a challenging task in distinguishing which products should be subject to tariffs and which should not, even when they are very similar. For instance, textiles utilized in producing apparel from Canada and Mexico must incorporate specific components made in North America, such as sewing thread, pocketing fabric, narrow elastic bands, and coated fabric, in order to enter the US duty-free under the USMCA, as mentioned in a post on the US Customs and Border Patrol website.
Trucks are seen lining up near the Mexico-US border, awaiting the opening of the Otay Commercial crossing in Tijuana, Mexico on March 4, 2025. With the prospect of a 25% tariff, businesses may need to be more vigilant in ensuring compliance. However, the uncertainty surrounding whether previously noncompliant USMCA imports will incur a 25% tariff remains a significant concern.
During a recent call with reporters, an administration official directed inquiries to the US Trade Representative for more information. Nevertheless, the USTR declined to comment, redirecting CNN to US Customs and Border Protection.
CBP referred CNN to a statement released on Saturday affirming their readiness to implement the latest executive actions on tariffs. Meanwhile, a spokesperson mentioned that they are investigating whether goods previously exempt from tariffs, and consequently not filing USMCA-related paperwork, could now seek an exemption.
A White House spokesperson did not provide a response to CNN’s query. According to Tony Rivera, a global trade attorney at ArentFox Schiff, all companies should have the chance to claim the USMCA tariff exemption. However, the cumbersome compliance process may hinder companies from qualifying and shipping their goods before the April 2 deadline.
Gardner, a licensed customs broker, recently visited Chihuahua, Mexico to assist a client in sourcing more local inputs for their industrial steel parts to comply with regional value content requirements, including the 60% threshold. Personal visits to production facilities are crucial to ensuring compliance with USMCA regulations, which also encompass paying workers $16 an hour and adhering to various intellectual property rules.
In summary, the complexities of the compliance process underscore the challenges faced by businesses navigating the USMCA requirements.
