CUSMA in plain language for online sellers

CUSMA is the trade agreement between Canada, the United States and Mexico. It replaced NAFTA on July 1, 2020. In the US it is called USMCA. For a store or a manufacturer, it does one main thing: goods that qualify can cross between the three countries without the ordinary duty.

Which goods qualify

Goods qualify when they meet the agreement's rules of origin. In short:

• Wholly made in the region. Grown, mined or made entirely in Canada, the US or Mexico.
• Changed enough in the region. Made from materials from elsewhere, but transformed in North America in the way the rule for that product requires. The rule depends on the tariff code: some products need a change of tariff code, some a minimum share of regional value.
• Clothing has its own rules. Garments generally have to be made from yarn and fabric produced in the region, then cut and sewn there.

The last point catches many clothing sellers: a garment sewn in the US from imported fabric may not qualify.

Making a claim

A CUSMA claim is made with a certification of origin. It has no set form: it can sit on the invoice or in a separate document, as long as it includes the information the agreement lists, such as who certifies, the goods and their tariff codes, and why they qualify. The importer, the exporter or the producer can complete it.

Many low value shipments do not need a certification at all. Under the agreement, a country should not require one for goods worth US$1,000 or less, and a country can set a higher limit.

Whoever claims should keep the records that support it for at least five years.

What CUSMA does not do

• It does not remove sales tax. GST, HST and US state taxes still apply.
• It does not cover every extra charge. Some recent tariffs and surtaxes exempt goods that qualify for CUSMA and some do not. Border news lists which is which, every morning.
• It is not automatic. Without a claim, the ordinary duty applies even to goods that would qualify.

A first check before you claim

Othermile's CUSMA check walks through the questions that decide whether a product is likely to qualify, and shows what a claim could save. It is a first look, not a certification. For a real claim, especially on products made from imported materials, a licensed customs broker can confirm it, and Othermile can introduce you to one.

This guide explains public rules in plain language for general information. It is not customs, tax or legal advice; the exact tariff code, your paperwork and the carrier decide the final amount.