**Washington D.C.**: In response to new tariffs on imports from Canada and Mexico, the U.S. government has postponed implementation, leading to a surge in demand for USMCA certification as businesses rush to ensure compliance and avoid potential duties amidst evolving trade policies.
In a significant shift in trade policy, the United States government has initiated a temporary relief measure regarding import tariffs on goods covered under the U.S.-Mexico-Canada Agreement (USMCA). Following the announcement of fresh 25% tariffs on goods imported from Canada and Mexico on March 5, the White House later decided to delay these levies for USMCA-covered goods until April 2. This delay has led to an increase in American companies seeking exemptions under the trade agreement.
Industry experts have identified a rush among importers to obtain USMCA certification due to the heightened risk posed by potential tariffs. “We’re seeing importers rush to become USMCA certified… the risk is just too high not to,” stated Brian Riley, senior vice president of customs house brokerage at logistics firm GEODIS. The urgency comes as many businesses, particularly smaller enterprises that rely on cross-border trade, scramble to ascertain whether their products qualify for the exemptions that USMCA provides.
Recent data from S&P Global Market Intelligence reveals that only 37.8% of imports from Canada and 48.9% from Mexico currently qualify for duty-free entry under the USMCA. To achieve this certification, importers must conduct a thorough analysis of their bills of materials—a detailed list outlining all parts and materials used in a product—to determine compliance with the necessary requirements.
Mike Short, president of Global Forwarding at C.H. Robinson, noted an uptick in requests for USMCA qualification and tariff classification even prior to the formal announcement. “Now that the official amendments are published, these requests have only increased, and we expect this trend to continue,” he remarked.
Historically, many businesses had been hesitant to pursue certification due to the complexities and associated costs, especially since their goods could enter the U.S. duty-free prior to the new tariffs. Maintaining USMCA certification requires diligent record-keeping for up to five years post-import, in addition to ensuring ongoing compliance with the agreement’s stipulations.
The uncertainty surrounding the expiration of the exemption has prompted companies to act preemptively. “Companies are hedging their bets by becoming USMCA certified because what’s to say the exemption may not continue after April 2? Or, if the exemption expires then, what if it returns in the near future?” Riley added.
Sung Choi, vice-president of product management at supply chain solutions provider e2open, highlighted the drastic shift for companies that previously did not need to consider certification. “If you are slapping 25-50% tariffs on everything, companies that never previously needed to are now forced to evaluate if this (USMCA certification) is an option.”
As the deadline approaches, the landscape of trade between the U.S., Canada, and Mexico appears increasingly complex, with businesses reassessing their strategies and compliance efforts amidst changing trade dynamics.
Source: Noah Wire Services
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