USMCA and Tariff Relief in 2025

The United States-Mexico-Canada Agreement (USMCA), which replaced NAFTA, is central to North American trade. In 2025, the landscape is evolving: the U.S. has imposed a 25% National Emergency Tariff on most imports, but USMCA-compliant goods from Canada and Mexico remain exempt. This makes qualifying for a USMCA tariff exemption more valuable than ever, as it can mean the difference between profitability and steep costs for cross-border businesses.

For many importers and exporters, these exemptions are now a strategic necessity. Products that previously didn’t justify the effort to claim USMCA status now offer substantial savings. Understanding the updated rules, documentation, and compliance requirements is essential for maintaining a competitive edge in North American markets.

What Is the USMCA Agreement?

The USMCA agreement is a modernized trade pact between the U.S., Mexico, and Canada. It was designed to strengthen regional supply chains, protect intellectual property, and ensure fair labor practices. The agreement covers a broad range of goods and services, impacting industries from agriculture and manufacturing to technology and energy.

USMCA tariffs are structured to reward compliance. Qualifying goods enjoy duty-free access across the three countries, while non-compliant goods face significant tariffs. This incentivizes businesses to adapt their supply chains and documentation practices to meet USMCA requirements, ensuring that tariff exemptions support regional economies.

Who Can Qualify for Tariff Exemptions Under USMCA?

USMCA tariff exemptions are available to manufacturers, importers, exporters, and distributors trading goods among the U.S., Mexico, and Canada. The central qualification is that products must be “originating goods”-made or substantially transformed in North America.

For example, a U.S.-manufactured auto part using mostly North American materials will likely qualify. However, goods assembled with significant non-member country components may not, unless they undergo substantial transformation or meet specific regional value content (RVC) thresholds.

Originating Goods Explained

A product is considered “originating” if it is:

  • Wholly obtained or produced in one or more USMCA countries.
  • Made from non-originating materials that undergo sufficient transformation in North America to meet product-specific rules of origin.
  • Assembled in North America and meets RVC requirements, which vary by product category.

USMCA Rules of Origin: Key Requirements in 2025

Regional Value Content (RVC) and Tariff Shift

To qualify for USMCA tariff exemptions, products must meet detailed rules of origin. The two main requirements are:

  • Regional Value Content (RVC): A minimum percentage of the product’s value must originate from USMCA countries. For example, vehicles must contain at least 75% regional content to qualify.
  • Tariff Shift: Non-originating materials must be transformed enough to change their tariff classification, indicating substantial processing within North America.

For instance, an electronic device assembled in Mexico from U.S. and Canadian components may qualify if it meets the RVC threshold and the tariff shift rule. These requirements help ensure that only genuinely North American goods benefit from tariff exemptions.

Documentation and Compliance

Proper documentation is essential for compliance. Businesses must prepare and retain a Certificate of Origin, including all nine USMCA-required data elements. Accurate records of sourcing, manufacturing, and shipping must be kept for at least five years in case of customs audits. This documentation is critical for proving compliance during customs checks and audits.

USMCA Tariff Exemption List: Which Products Qualify?

The USMCA tariff exemption list covers a wide range of goods, including agricultural products, automotive parts, electronics, pharmaceuticals, energy raw materials, and more. In 2025, exemptions have expanded to include over 1,000 products, such as semiconductors, smartphones, copper, timber, and key minerals.

Key Sectors with High Exemption Rates

Some sectors enjoy near-total exemption from new tariffs:

  • Petroleum products and coal derivatives (100%)
  • Copper (100%)
  • Wood-based panels and sawn wood (94-96%)
  • Pharmaceuticals (up to 84%)
  • Energy raw materials (95%)
  • Semiconductors and electronics (broadly defined in 2025)

This selective approach protects critical industries and supply chains, ensuring continued access to essential materials and components.

Technology and Electronics Exemptions

A 2025 Presidential Memorandum clarified that “semiconductors” now include a wide range of electronics, such as smartphones, flat panel displays, and integrated circuits. Importers of these products can claim exemption by using specific HTS codes and reporting secondary classifications as directed by U.S. Customs and Border Protection (CBP).

For a detailed list, refer to the official White House fact sheet and the CBP’s 2025 Tariff Requirements PDF.

How to Claim a USMCA Tariff Exemption

Step-by-Step Process

  1. Check eligibility: Confirm your product meets USMCA rules of origin using the tariff exemption list and HTS codes.
  2. Certificate of origin: Prepare and retain a USMCA Certificate of Origin with all required data elements. There’s no mandated format, but the certificate must include information on the certifier, exporter, producer, importer, goods description, and origin criteria.
  3. Recordkeeping: Maintain detailed records of sourcing, manufacturing, and value calculations for at least five years.
  4. Customs declaration: Declare USMCA status at the border and be ready to provide documentation if requested by CBP. For electronics and semiconductors, use the correct secondary classification (e.g., 9903.01.32) to claim your exemption.

Best Practices

  • Stay updated with CBP guidance.
  • Conduct regular internal audits of your supply chain and documentation.
  • Consult with trade compliance experts for complex products or supply chains.

Avoiding Mistakes: Common Pitfalls in USMCA Qualification

Incomplete Documentation

Failing to maintain proper records or omitting required data on the Certificate of Origin can lead to denial of USMCA tariff exemptions. Always double-check that your documentation is complete and up to date.

Misclassification and Insufficient Transformation

Incorrectly classifying goods or assuming minor assembly qualifies as substantial transformation are common errors. Only products that meet the specific rules of origin and RVC thresholds will be exempt. Goods must also be shipped directly between member countries without significant processing elsewhere.

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Customs Audits and Enforcement

CBP has increased scrutiny of USMCA claims in 2025, especially for complex goods like automobiles and electronics. Be prepared for audits and ensure your records can stand up to verification. Understanding non-U.S. content in vehicles, for example, can lead to retroactive full-duty liability and penalties.

How Commenda Helps with USMCA Compliance

Commenda offers a suite of tools and advisory services to simplify USMCA compliance. Our platform provides:

  • Automated tracking of origin compliance and RVC calculations.
  • Centralized dashboards for document management and audit readiness.
  • Real-time updates on USMCA tariff exemption requirements.
  • Expert trade advisory for U.S. importers and exporters.

Explore our sales tax solutions, compliance services, or book a demo to see how Commenda can streamline your USMCA processes.

Conclusion: Stay Ahead of 2025 USMCA Changes

Staying compliant with USMCA tariff exemption requirements in 2025 is more important than ever for North American businesses. With shifting regulations and new tariffs, proactively reviewing your product qualifications, maintaining thorough documentation, and keeping up with the latest trade updates is essential to maximize savings and minimize risk. By leveraging expert support and digital compliance tools, you can confidently navigate the evolving landscape, ensure your goods remain eligible for tariff exemptions, and protect your bottom line. For tailored guidance and streamlined compliance, consider consulting Commenda’s experts or exploring their platform solutions.

FAQs About USMCA Tariffs and Exemptions

  1. What’s the difference between NAFTA and USMCA?

USMCA replaced NAFTA in 2020, updating rules for automotive, technology, labor, and digital trade. It features stricter origin requirements and broader sector coverage, making compliance more complex but also more rewarding for qualifying goods.

  1. How do I know if my product is exempt?

Check the tariff exemption list and confirm your product’s HTS code and origin status. For electronics and semiconductors, review the White House memorandum.

  1. How often do USMCA rules change?

Some rules have scheduled updates, especially for the automotive and technology sectors. New guidance can be issued as trade policies evolve, so regular compliance reviews are essential.

  1. Can I still qualify if some components come from outside North America?

Yes, if your product meets the RVC threshold or undergoes sufficient transformation to satisfy the rules of origin. Maintain detailed sourcing and value calculation records to support your claim.

  1. What happens if my USMCA claim is denied?

You may be liable for the full 25% tariff and face penalties. Ensure your documentation and classification are accurate, and seek expert advice if needed.

By following these steps and staying current with USMCA requirements, your business can maximize savings and maintain compliance with USMCA tariff exemptions in 2025. For tailored support, consult Commenda’s experts or use our platform for end-to-end compliance.

This article is for informational purposes only and does not constitute legal advice. For personalized guidance, consult a trade compliance expert or contact Commenda directly.