At the front lines of the trade war: what’s exempt, what isn’t, and what’s still to come – Financial Post At the front lines of the trade war: what’s exempt, what isn’t, and what’s still to come – Financial Post

A few weeks ago, the United States delayed its promised tariffs on Canadian goods that “claim and qualify” for preference under the Canada-United States-Mexico Agreement (CUSMA). Goods can qualify for such preference if a specified amount of their value originates in one of the three countries and their importer, exporter or producer completes the requisite “certification of origin” form.

According to RBC Economics, however, a large chunk of Canadian goods to the U.S. that would likely qualify for preferential CUSMA treatment aren’t exported that way — partly because doing so requires additional administrative work and it’s simpler to qualify for low- or zero-tariff rates under the World Trade Organization’s “most favoured nation” (MFN) rule.

“If you’re a Canadian company exporting to the U.S. (and your good qualifies for a 0% MFN tariff), you may not bother going through the hassle of certifying CUSMA origin,” Matthew Kronby, a partner in Osler’s International Trade and Investment group, tells the Financial Post. “But for other goods where there is a meaningful tariff rate, you probably would.”

For many companies, navigating CUSMA’s complex rules-of-origin requirements isn’t worth the hassle for products made in multiple places or from material with several sources.

“If it’s a large, sophisticated company, they can undertake it in-house,” Matthew says. “But many companies are going to look to the assistance of custom brokers and/or trade lawyers, depending on the degree of complexity that we’re talking about.”

You can read the full article, “At the front lines of the trade war: what’s exempt, what isn’t, and what’s still to come, “ on the Financial Post website.