The Default Answer: Most Canadian Goods Enter Duty-Free Under USMCA
USMCA — the agreement that replaced NAFTA in July 2020 — preserves the core principle of duty-free trade for goods that originate in North America. For the vast majority of Canadian exporters, this means filling out a one-page origin certification and paying nothing at the border. No tariff. No federal sales tax. No VAT equivalent. The US is unusual among developed economies in not charging a value-added tax on imports, which makes the landed cost calculation simpler than shipping to the UK, EU, or even back to Canada.
What changed from NAFTA to USMCA: the origin rules for autos got stricter, the agreement added a digital trade chapter, and the labor value content requirement for vehicles was new. For most other goods — machinery, food products, consumer goods, construction materials — the origin rules are functionally the same as they were under NAFTA. If it qualified for NAFTA, it almost certainly qualifies for USMCA.
For comparison with the reverse lane, see our US to Canada duty guide — Canadian importers face a more complex picture because Canada levies GST and provincial taxes on imports, which the US does not.
Three Product Categories Where Canadian Goods Do Face US Tariffs
No trade agreement covers everything. Here are the categories where Canadian exporters need to budget for actual duty payments — not because USMCA failed, but because these products sit outside its normal coverage:
| Product Category | Typical US Duty | Why It's Not Zero |
|---|---|---|
| Softwood lumber | 8%–18% AD/CVD | Separate anti-dumping & countervailing duty orders, renewed through each DOC administrative review. Not covered by USMCA tariff elimination because AD/CVD duties operate under a different legal framework — they're remedial, not protective. Rate is company-specific: a Canfor mill pays different than a West Fraser mill. Check the DOC's most recent review before quoting. |
| Steel & aluminum (Section 232) | 50% bulk / 25% derivatives | Section 232 national security tariffs were imposed in 2018, and Canada's exemption ran only until March 2025: the country tariff-rate quotas and alternative arrangements were revoked on 12 March 2025, and the metals rate rose to 50% in June 2025. Canadian steel and aluminum now pay the global rate — 50% on bulk metal articles, or 25% where a derivative article's metal content exceeds 15% by value, both on full customs value since 6 April 2026. USMCA does not remove a Section 232 metals duty. How the tiers work |
| Dairy, poultry, eggs (supply-managed) | Varies — TRQs | Canada's supply management system limits US dairy access into Canada, and the US maintains reciprocal restrictions. USMCA created small TRQ increases for US dairy but didn't eliminate US-side barriers. Above-quota tariffs on dairy can exceed 100%. |
Beyond these three: Canadian crude oil and natural gas enter the US duty-free. Electricity imports from Hydro-Québec and BC Hydro are tariff-free. Wheat, canola, beef, and pork clear without duties under USMCA. Most manufactured goods — machinery, chemicals, plastics, lumber-alternatives — pay zero at the border. For the shipping-cost side, the landed cost calculator lets you plug in freight and insurance to see the full CIF picture.
USMCA Origin Rules — How CBP Decides Your Product Qualifies
Qualifying for USMCA zero-duty treatment isn't automatic just because the goods shipped from a Canadian address. US Customs and Border Protection looks at where the product was substantially transformed, not where the label says. This trips up two groups of exporters in particular.
First, the re-exporter problem. A Canadian distributor buys widgets from China, warehouses them in Mississauga, and sells them to a US customer. CBP catches this during entry review and assesses Chinese MFN rates — which might be 25% under Section 301. Warehousing in Canada doesn't change origin. The product has to be made in Canada, or substantially processed there (i.e., transformed into a different HS code), to qualify as Canadian under USMCA.
Second, the regional value content threshold. For manufactured goods with non-North American components, USMCA requires at least 60% of the transaction value from North American materials and labor (75% for autos). Most Canadian-made products clear this easily. Where it gets tested: electronics assembled in Canada from Asian components; furniture made in Canada with imported hardware and fabrics; processed foods using imported ingredients.
Documentation: a USMCA certification of origin. No prescribed form — a statement on the commercial invoice works — but it must include certifier details, product description with HS code (first six digits), the specific origin criterion met, and a signed certification. Keep records for five years. CBP audits USMCA claims; if disallowed, you owe back duties plus interest. The EU-UK TCA Origin Rules guide shows how a similar concept works in the post-Brexit context.
The Automotive Exception — USMCA's Tighter Rules for Cars and Parts
Autos got singled out in the USMCA renegotiation. Under NAFTA: 62.5% regional value content. Under USMCA: 75% RVC — now fully phased in. Additionally, 70% of a producer's steel and aluminum purchases must be North American, and 40–45% of content must be made by workers earning at least $16/hour. For auto parts: 65–75% RVC depending on whether the part is "core" (engine, transmission, chassis: 75%) or "principal" (everything else: 65%). In practice, most Canadian auto parts and vehicles still qualify because the North American auto supply chain is deeply integrated — but the paperwork is heavier than under NAFTA.
Softwood Lumber — Four Decades of Dispute, Still No Resolution
The US-Canada softwood lumber dispute has been running since 1982. At its core: most Canadian timber is harvested from public (Crown) land, where stumpage fees are set by provincial governments. US producers argue this amounts to a subsidy. Canadian producers argue US mills simply can't meet domestic demand. Regardless of who you agree with, the practical effect is that softwood lumber carries AD/CVD duties outside the USMCA framework. These are company-specific — a BC producer might pay 8%; a Quebec mill 14%. The rate updates through annual DOC administrative reviews.
What counts: dimensional lumber (2x4s, 2x6s), boards, framing lumber, certain engineered wood products. What doesn't: finished furniture, pre-fabricated homes, log home kits, hardwood products (oak, maple, birch). If you're at the edge of the definition, get a CBP binding ruling before you ship. If you also handle non-lumber goods from Canada, see how furniture imports from China face a similar AD/CVD overlay — the legal mechanism is the same.
De Minimis Is Gone — What Still Makes Canada→US Simple
USMCA-qualifying goods still enter duty-free, and that is now the only route to a zero-duty line. Section 321 de minimis — the old $800-or-less exemption — has been suspended since 29 August 2025 and no longer shelters any origin. A Canadian seller shipping a $600 bicycle to a US customer pays duty unless the bicycle qualifies under USMCA: origin decides now, not value. The reverse lane is still heavier — a $200 US→Canada shipment faces full CBSA treatment plus GST/PST — so the structural advantage survives, resting on USMCA paperwork instead of on a threshold.
Caveat: the old per-person-per-day rule no longer buys anything, so splitting a shipment across days saves no duty. What decides the bill now is the USMCA claim on each line — with a valid origin certification, qualifying goods enter at zero regardless of value; without one, duty applies from the first dollar. For how the suspension happened and what replaced it, read our 2026 de minimis reform analysis.
Customs Entry Types for Canadian Shipments
Low-value entries: parcels that used to clear duty-free under Section 321 / Type 86 now require an entry with duty paid. Carriers file these on your behalf and add a clearance charge — confirm the entry type with yours before quoting a delivered price.
Formal entry (Type 01): For higher-value consignments, and for any shipment where you act as importer of record. Requires a customs bond, a CBP importer number (Form 5106) and full entry documents. A $50,000 continuous bond costs ~$300–500/year. For the full procedure, see our US import customs clearance guide.
Related Trade Corridors
Frequently Asked Questions
Do most Canadian goods pay US customs duty?
No. Under USMCA, the overwhelming majority of goods that originate in Canada enter the United States with zero duty. The main exceptions: softwood lumber (AD/CVD), steel and aluminum under Section 232 — which applies to Canada at full rate since the country quotas were revoked in March 2025 — and certain agricultural TRQ products. File the USMCA origin certification. Products manufactured outside North America and transshipped through Canada do not qualify — they pay the MFN rate of the actual country of origin.
Does the US charge VAT or GST on imports from Canada?
No. The United States has no federal value-added tax or GST. Imports are not subject to any sales tax at the federal level. Some states may assess use tax, but this is collected at the state level, not by CBP. This makes the US a significantly simpler import destination than Canada, the UK, or EU member states. For how import VAT works in jurisdictions that do charge it, see our import VAT guide.
What paperwork does a Canadian exporter need for US customs?
At minimum: a commercial invoice with seller/buyer details, product description, quantity/value, country of origin, and HS code (first 6 digits). For USMCA: add the certification statement. Where you are the importer of record: customs bond and CBP importer number. Include the HS code on the invoice — it materially speeds CBP processing versus letting the broker classify at entry.
How do Section 232 tariffs affect Canadian steel and aluminum exports?
They pay it. Canada's Section 232 exemption was quota-based, and the quotas were revoked on 12 March 2025 together with the other country arrangements; the metals rate also rose to 50% in June 2025. USMCA does not carve metals out of Section 232 — a USMCA origin claim settles the MFN rate, not the national-security measure. The rate that applies is 50% on bulk metal articles, or 25% on derivative articles whose metal content exceeds 15% by value, both charged on full customs value since 6 April 2026. Products not originating in Canada may also face it even when shipped from a Canadian address, and the country of smelt and cast has to be declared either way. The Section 232 guide covers the tiers and the relief routes.