Navigating 2025 Tariffs: Why USMCA Compliance Is More Critical Than Ever for Shippers

Nov 11, 2025
7 min read

If you're shipping freight between Canada and the United States in 2025, understanding USMCA (United States-Mexico-Canada Agreement) compliance isn't just recommended—it could save you 25% or more on every shipment.

With the recent implementation of National Emergency Tariffs and ongoing trade policy changes, Canadian shippers who can prove USMCA compliance are gaining a massive competitive advantage. Here's everything you need to know.

What's Happening Right Now in Cross-Border Freight

Peak season in 2025 is expected to last longer than usual, with volumes at their highest since 2021, driven largely by companies front-loading shipments to avoid tariff increases.

The freight market is experiencing unique pressures:

Canadian shippers should plan for longer transit times through Vancouver and Halifax terminals while Toronto maintains efficient connections for Eastern Canada destinations
The freight market remains generally soft overall, with tightness from the Canadian West Coast to western Canada due to seasonal freight moves
Cross-border U.S. freight shipments with Canada and Mexico totaled over $144.8 billion in March 2025, representing an 8.4% increase over March 2024

Bottom line: Cross-border trade volumes are strong, but tariff uncertainty is creating urgency around proper documentation.

The USMCA Tariff Exemption: Your 25% Savings Opportunity

Here's what changed in 2025 and why it matters:

The National Emergency Tariffs

In early 2025, President Trump announced adjustments imposing an additional 25% tariff on almost all imported products from Mexico and Canada. However, there's a critical exemption.

The Game-Changing Exemption

All products of Canada and Mexico that comply with USMCA and are imported into the United States are exempt from the National Emergency Tariffs.

What this means for you:

USMCA-compliant shipments: 0% additional tariff
Non-compliant shipments: +25% additional tariff

For a $100,000 shipment, that's a $25,000 difference. Suddenly, USMCA compliance documentation is worth the effort.

What Products Qualify for USMCA Tariff Exemptions?

Products must meet USMCA rules of origin using the tariff exemption list and HTS codes to qualify for exemptions. The agreement allows materials produced in Mexico, Canada, or the United States to be considered "originating" and qualify for duty-free treatment.

Four Ways to Qualify Under USMCA:

Wholly Obtained or Produced - Materials from North America (e.g., Canadian mineral ores, American lumber)
Tariff Shift Rule - Product undergoes substantial transformation in a USMCA country
Regional Value Content (RVC) - Specific percentage of product value comes from USMCA countries
- Most goods: 60-75% regional content required
- Automotive: 75% regional content required
De Minimis Rule - Goods can qualify as originating if they contain no more than 10% of non-originating materials

Special Considerations by Industry:

Automotive (High Stakes)

As of 2024, vehicles must contain at least 75% regional content to qualify as originating, with additional workforce wage requirements
The delayed compliance date for vehicle certification provisions is May 19, 2025, including labor value content certification, steel purchasing certification, and aluminum purchasing certification

Textiles & Apparel

Sewing thread, pocketing fabric, narrow elastic bands, and coated fabric used in apparel production must now be made in North America to qualify as originating

Electronics & Semiconductors

A 2025 Presidential Memorandum clarified that semiconductors now include a wide range of electronics such as smartphones, flat panel displays, and integrated circuits

Required Documentation: The USMCA Certificate of Origin

Unlike NAFTA, USMCA doesn't require a specific form. USMCA requires nine specific data elements which can be presented in any format, and the certification can be completed by the importer, exporter, or producer.

The 9 Required Data Elements:

Certifier information (name, title, address, contact)
Exporter details
Producer information
Importer details
Description of goods
HS tariff classification (6-digit minimum)
Origin criterion (which rule you're using)
Blanket period (if applicable)
Authorized signature and date

Pro Tip: While CBP provides a suggested template, you can create your own format as long as all nine elements are included.

Recordkeeping Requirements

Maintain detailed records of sourcing, manufacturing, and value calculations for at least five years. CBP can audit your claims, and incomplete documentation can result in denied exemptions and penalties.

Step-by-Step: How to Claim USMCA Tariff Exemptions

Step 1: Verify Eligibility

Check your product against USMCA rules of origin
Calculate Regional Value Content (RVC) if applicable
Confirm substantial transformation occurred in USMCA territory

Step 2: Prepare Certificate of Origin

Include all 9 required data elements
Have it completed by importer, exporter, or producer
No specific format required - flexibility similar to modern trade agreements

Step 3: Customs Declaration

Declare USMCA status at the border and be ready to provide documentation if requested by CBP
For electronics and semiconductors, use correct secondary classification codes

Step 4: Maintain Compliance

Keep records for 5+ years
Conduct regular internal audits
Update certificates when supply chains change

Common Mistakes That Cost You the Exemption

1. Incomplete Documentation

Failing to maintain proper records or omitting required data on the Certificate of Origin can lead to denial of USMCA tariff exemptions.

What to avoid:

Missing any of the 9 required data elements
Vague product descriptions
Incorrect HS codes
No supporting RVC calculations

2. Incorrect Origin Assumptions

Incorrectly classifying goods or assuming minor assembly qualifies as substantial transformation are common errors.

Reality check:

Simply packaging goods in Canada ≠ USMCA qualifying
Minor assembly usually doesn't meet transformation rules
Must meet specific RVC thresholds

3. Transshipment Issues

Goods must be shipped directly between member countries without significant processing elsewhere.

If your goods route through a non-USMCA country and undergo processing, they may lose originating status.

Industry-Specific Guidance

Manufacturing & Industrial Goods

Most manufacturers shipping daily loads (like automotive parts, machinery, consumer goods) will benefit significantly from USMCA compliance. The 75% threshold is challenging but achievable with proper sourcing strategies.

Action item: Map your supply chain. Calculate what percentage of your inputs come from North America. If you're close to 75%, consider switching suppliers for certain components.

Food & Beverage

Health-care product pipelines and higher per-capita consumption of fresh produce raise temperature-controlled freight needs, and many food products naturally qualify under USMCA as wholly obtained goods.

Advantage for Canadian food shippers: Most agricultural products grown/raised in Canada automatically qualify. Your Certificate of Origin will be straightforward.

Retail & Distribution

If you're shipping goods for retail (dry van or reefer to Target, Walmart, etc.), verify the product origin before claiming USMCA benefits.

Watch out: Many retail goods are manufactured in Asia. Unless they undergo substantial transformation in North America, they won't qualify for USMCA treatment.

The Financial Impact: Real Numbers

Let's look at actual savings scenarios:

Scenario 1: Daily FTL Manufacturer (Ontario → California)

Shipments: 5 loads/week × 52 weeks = 260 loads/year
Average shipment value: $50,000
Without USMCA compliance: $50,000 × 25% = $12,500 per load in tariffs
Annual tariff exposure: $12,500 × 260 = $3,250,000

With USMCA compliance: $0 in additional tariffs

Your savings: $3.25 million annually

Scenario 2: LTL Distributor (1-5 Skid Weekly Shipments)

Shipments: 52 loads/year
Average shipment value: $15,000
Without USMCA compliance: $15,000 × 25% = $3,750 per load
Annual tariff exposure: $3,750 × 52 = $195,000

With USMCA compliance: $0

Your savings: $195,000 annually

Even for smaller shippers, the math makes USMCA documentation worth pursuing.

Working With Your Freight Broker

Your freight broker should be helping you navigate these requirements. Here's what to expect:

What AutoFreight Does for Our Clients:

Pre-shipment consultation - We discuss USMCA eligibility before quoting

Documentation guidance - We provide templates and checklists for Certificates of Origin Customs coordination - We work with licensed customs brokers to ensure smooth border crossings

Carrier selection - All our carriers understand USMCA requirements and proper documentation procedures

Questions to Ask Your Broker:

"Can you help me determine if my products qualify for USMCA treatment?"
"Do your carriers have experience with USMCA-documented shipments?"
"What happens if CBP requests verification of my Certificate of Origin?"
"Can you coordinate with customs brokers on my behalf?"

If your broker can't confidently answer these questions, it might be time to find one who can.

What's Coming in 2026 and Beyond

The ATA predicts that current tariffs on Canada and Mexico will reduce cross-border trucking transportation in 2025 due to higher consumer prices on imported goods, though uncertainty abounds over how long the tariffs will last.

Preparing for Ongoing Changes:

Stay informed:

Monitor CBP announcements for enforcement updates
Watch for reciprocal tariff announcements
Track USMCA implementation guidance releases

Build flexibility:

Diversify your carrier network
Maintain relationships with customs brokers
Keep supply chain documentation current

Invest in compliance:

Consider supply chain audits
Train internal teams on USMCA requirements
Implement systems to track product origins

Action Steps for Canadian Shippers

This Week:

Audit your current shipments - Which products are you shipping to the US?
Review product origins - Where are your goods manufactured/produced?
Calculate potential savings - What would 25% tariffs cost you annually?

This Month:

Contact suppliers - Get documentation of where materials/components originate
Calculate RVC percentages - Do your products meet the thresholds?
Create Certificates of Origin - Start documenting USMCA compliance
Talk to your freight broker - Ensure they can support USMCA shipments

This Quarter:

Implement recordkeeping systems - 5-year documentation retention
Train your shipping team - Everyone should understand requirements
Conduct compliance audits - Verify all documentation is complete
Plan supply chain adjustments - Consider North American sourcing where it makes sense

The Bottom Line

2025's tariff environment has made USMCA compliance transition from "nice to have" to "business critical" for Canadian shippers. With proper qualification, these exemptions are a strategic necessity and can mean the difference between profitability and steep costs for cross-border businesses.

The good news? If you're shipping manufactured goods, food products, or anything with significant North American content, you likely already qualify. You just need to document it properly.

The investment: A few hours of documentation work per product line The return: Avoiding 25% tariffs on every shipment The urgency: Now—every shipment without proper USMCA documentation costs you money

Need Help With USMCA Compliance for Your Shipments?

At AutoFreight Transportation, we specialize in cross-border freight between Canada and the United States. We guide our clients through USMCA documentation requirements and work with licensed customs brokers to ensure smooth, compliant border crossings.

Contact us for:

USMCA eligibility consultations
Certificate of Origin guidance
Customs brokerage coordination
Compliant carrier selection

Email : yash@autofreight.ca Phone # 647-704-1289

Disclaimer: This blog provides general information about USMCA requirements. For specific legal or tax advice, consult with a licensed customs broker or trade attorney.