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CBC
22-07-2025
- Business
- CBC
Many Canadian exports can avoid Trump tariffs if CUSMA-compliant. Here's what that means
Canadian exporters across a wide range of industries have a way to escape U.S. President Donald Trump's blanket tariffs. That escape hatch is compliance with the Canada-U.S.-Mexico Agreement (CUSMA), the three-way free trade deal signed by Trump back in 2018. U.S. and Canadian officials have said the across-the-board tariffs Trump is threatening to impose on Aug. 1 won't apply to goods that comply with the terms of CUSMA. Trade policy experts say the vast majority of Canadian exports can qualify for this exemption, and that's leading to a stampede of companies rushing to do the paperwork to get their products deemed compliant. Here's what you need to know about CUSMA compliance and how it could protect much of Canada's cross-border trade from Trump's tariffs. What is the CUSMA exemption, and why does it matter? Back in March, Trump imposed 25 per cent tariffs on Canadian exports to the U.S., except energy and potash, which were hit with a 10 per cent tariff. (That's the blanket tariff he's threatening to boost to 35 per cent if there's no deal reached by Aug. 1.) However, Trump quickly amended those tariffs, exempting products that qualify for duty-free status under CUSMA. That exemption — originally characterized as a one-month pause — remains in effect. Around 86 per cent of the value of Canada's exports to the U.S. have the potential to qualify for that exemption and cross the border without tariffs, according to an analysis by RBC Economics. WATCH | Carney downplays chances of zero-tariff deal with Trump: Carney expects tariffs to be part of U.S. trade deal 6 days ago Wolfgang Alschner, the Hyman Soloway Chair in Business and Trade Law at the University of Ottawa, says this gives Canada "a huge comparative advantage" over the rest of the world, which faces broad-based tariffs on nearly all exports to the U.S. "It's a huge deal," said Alschner in an interview. "It's not perfect and it's not good for some [sectors], but overall it's the best deal for any country in the world that currently exists." Which Canadian exports are tariff-exempt through CUSMA? Since the vast majority of products have the potential to qualify for the exemption, it's actually quicker to list the products that don't. Products that contain predominantly non-North American content that are merely shipped on to the U.S. from Canada don't qualify as CUSMA-compliant. The exemption does not apply to products that face Trump's sector-specific tariffs — namely the 50 per cent tariff on steel and aluminum and the 25 per cent tariff on non-U.S. content of automobile imports. But beyond those sectors, anything that is grown in or extracted from Canadian soil, or built with Canadian labour can enter the U.S. market tariff-free under CUSMA. Even U.S. Commerce Secretary Howard Lutnick agrees. On the CBS program Face the Nation, Lutnick dismissed as "silly" the interviewer's suggestion that free trade with Canada is dead, and said 75 per cent of U.S. imports from Canada and Mexico cross the borders tariff-free. What makes an export CUSMA-compliant? In general terms, any product made in Canada has the potential to be considered CUSMA-compliant. However, the exporter has to jump through some hoops and deal with some paperwork to prove enough of the product actually comes from Canada to qualify. This means meeting CUSMA's rules of origin. The rules vary among products, but generally 60 to 75 per cent of a good must come from within North America to be tariff-free. Laura Dawson, executive director of the Future Borders Coalition, an organization that advocates for smoother Canada-U.S. trade and travel, says it can be painstaking and time-consuming to show that a product meets those rules of origin, but it's becoming the "new reality" for Canadian exporters. "It's something businesses are going to have to accept, that if they want to do business with the United States, they're going to have to prove compliance," Dawson said in an interview. How do you prove an export complies with CUSMA? Proving compliance involves obtaining what's called a certificate of origin to smooth the product's tariff-free journey across the border. Steve Bozicevic, chief executive officer of A & A Customs Brokers, says his company's work in providing those certificates has exploded in recent months. "Getting the certification is relatively easy," Bozicevic said in an interview. "Proving it if you get audited, if you are buying things from overseas and processing them, can get a little bit hairier." Official trade statistics show evidence more companies are doing this paperwork: the proportion of Canadian goods entering the U.S. explicitly duty-free neared 90 per cent in March and April, a jump from just below 80 per cent in the first two months of the year. How does the CUSMA exemption play into trade talks? All the indications from the Trump White House suggest that some level of tariffs are inevitable on at least some Canadian exports. That makes maximizing the proportion of Canadian exports that avoid tariffs a key mission for Canada's trade negotiators. The CUSMA exemption provides a path to achieve that, and the three-way trade deal is scheduled for renegotiation in July 2026. But of course, just as easily as he granted the exemption back in March, Trump could pull the plug on it at any time. "If that exemption goes away, we're in an Armageddon scenario," said Bozicevic.
Yahoo
26-05-2025
- Business
- Yahoo
EDC launches representation in Thailand, opening new doors for Canadian exporters
With an expanded presence in Southeast Asia, EDC can help Canadian companies seize opportunities in the region's third-largest market OTTAWA, ON and BANGKOK, May 26, 2025 /CNW/ - Export Development Canada (EDC) is pleased to announce the opening of its newest Asian representation in Bangkok, Thailand, marking a significant milestone in EDC's Indo-Pacific strategy. This expansion underscores EDC's commitment to supporting Canadian businesses in navigating and capitalizing on the dynamic and rapidly evolving Thai market. Thailand is a key driver of economic growth in Southeast Asia, and as one of the region's largest economies, boasted a gross domestic product (GDP) of over $500 billion in 2024. The country's strategic location at the heart of Southeast Asia, coupled with developed infrastructure and a business-friendly environment, makes Thailand an important hub for Canadian trade and investment in the Indo-Pacific region. Canadian exporters have already had success in the market, growing trade to Thailand by $1 billion, or 17%, between 2019 and 2024. "EDC has long focused on trade diversification to help Canadian companies seize opportunities beyond our traditional markets," said Alison Nankivell, President and CEO, EDC. "The new representation in Bangkok is part of EDC's broader Indo-Pacific strategy, aimed at investing in resources and relationships that align with both Canadian strengths and Thailand's economic and sustainability priorities. For companies looking to diversify into the Thai market or to establish a long-term presence, we're here to help you." This newly launched representation in Bangkok will provide vital assistance for Canadian exporters, helping these companies navigate the Thai market and seize on the country's growth opportunities. Agri-food, infrastructure, aerospace and clean technology are key sectors for Canadian exporters in Thailand. In 2024, EDC supported over 200 customers in Thailand, helping generate more than $350 million in business, and with potential for much more. Southeast Asia is a region with strong potential and has emerged as a priority market for Canadian companies. EDC's financing, insurance and knowledge solutions are designed to help companies manage trade-related risks, expand internationally and reach new markets. Our in-market staff in both Canada and in the Indo-Pacific region collaborate closely with Government of Canada trade partners, working alongside the Trade Commissioner Service and Global Affairs Canada to help Canadian exporters navigate the challenges of entering new markets and capitalize on growth opportunities in key sectors. "Thailand's strategic location and robust economic growth make it a valuable trade and investment partner for Canada in the Indo-Pacific region," said Sara Wilshaw, Senior Assistant Deputy Minister International Trade, and Chief Trade Commissioner Global Affairs Canada. "EDC's new presence in Bangkok aligns with the Government of Canada's broader strategy to strengthen bilateral trade relations and support Canadian companies as they explore new opportunities in this vibrant market." Canada and Thailand share a robust trade relationship, with bilateral trade upwards of $6 billion in 2024. Thailand's participation in the Association of Southeast Asian Nations (ASEAN) Free Trade Area and Canada's involvement in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) strengthen trade positions in the region. With Thailand's commitment to achieving carbon neutrality by 2050 and net-zero emissions by 2065, there are significant opportunities for Canadian companies specializing in renewable energy, energy efficiency solutions and sustainable technologies. The new Bangkok representation, led by Chief Representative Cindy Lim, complements EDC's existing Indo-Pacific representations in New Delhi, Mumbai, Shanghai, Beijing, Jakarta, Seoul, Tokyo, Ho Chi Minh City, Manila, Sydney as well as a branch in Singapore. About EDC Export Development Canada (EDC) is a financial Crown corporation dedicated to helping Canadian businesses make an impact at home and abroad. EDC has the financial products and knowledge Canadian companies need to confidently enter new markets, reduce financial risk and grow their business as they go from local to global. Together, EDC and Canadian companies are building a more prosperous, stronger and sustainable economy for all Canadians. For more information and to learn how we can help your company, call us at 1-800-229-0575 or visit SOURCE Export Development Canada View original content to download multimedia:
