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When Should You Refuse to Complete the USMCA Certificate of Origin?
On: June 19, 2019 | By: 
David Noah |
4 min. read
On July 1, 2020, the United States-Mexico-Canada Agreement (USMCA) replaced the North American Free Trade Agreement (NAFTA) as the primary instrument to eliminate duties on certain qualifying products traded among the three countries. Now, several years later, exporters continue to rely on USMCA to access preferential tariff treatment, but the evolving trade policy landscape under the new Trump administration has introduced renewed uncertainty.
Recent tariff announcements—some imposed, then paused, but still not officially off the table—have left exporters questioning how long USMCA benefits will remain stable. While USMCA remains in effect, companies should remain vigilant about shifting policies that may impact their costs and operations.
Rather than rushing blindly into preparing USMCA Certificates of Origin, now may be a good time for exporters to reassess whether utilizing USMCA makes financial and operational sense amid changing tariff policies.
Because of its complexity and specificity, USMCA can become more burdensome than it is useful for those tasked with computing whether or not their goods are eligible for preferential duty rates. Here are five situations when issuing a USMCA Certificate of Origin can cost you money, cause you headaches, and put you at risk for penalties—even more so if new tariffs override its benefits.
1. Your Products Are Already Duty-Free
Depending on what you’re exporting, the product may already be duty free under the Most Favored Nation (MFN) tariff schedule. Why take the time and incur the expense of completing the certificate if you don’t have to? To determine the duty status of items, you must know the harmonized code for your product and reference it with Canadian and Mexican tariffs. Shipping Solutions' Product Classification Software makes it easy to find your product’s classification (try it for free). With recent tariff threats, it’s even more important to check whether USMCA still provides an advantage. If new 
tariffs are imposed outside the agreement’s scope, your products could be impacted regardless of USMCA eligibility.
2. You Can’t Verify Your Products Qualify
Completing and signing the Certification of Origin is more than filling out a document. Don’t take the obligation lightly, and be certain that whomever certifies the document is both knowledgeable of the export and takes responsibility for it.
With increased scrutiny on trade compliance under the shifting tariff landscape, U.S., Canadian, and Mexican customs authorities may become even more stringent in verifying claims. The risk of penalties for inaccurate certifications is higher when trade tensions are elevated.
3. You Can’t Prove Origin
A product that’s made in the United States doesn’t automatically qualify for USMCA. The product must comply with USMCA rules of origin, which distinguish between “origin of goods” versus “originating in a North American country.” (Check out the blog post, Importing Basics: Country of Origin.)
With trade policy in flux, proving compliance becomes even more critical. If new tariffs target certain sectors or materials, companies may need to reevaluate whether their supply chains still allow their products to qualify under USMCA.
4. Certification Isn’t Worth the Effort
Sometimes, the costs of administering and maintaining a USMCA program and the training it requires make it too expensive and burdensome. Exporters and producers aren’t legally obligated to participate, and for some, the risk of non-compliance outweighs avoiding unnecessary duty payments.
This is especially true if new tariffs offset the benefits of USMCA certification. Exporters should continuously evaluate whether shifting trade policies change the cost-benefit equation of participation.
5. Your Products Simply Don’t Qualify
Finally, some companies choose to opt out for another good reason: their products just don’t qualify under the USMCA. If your goods don't qualify, you shouldn’t participate. Simple as that!
How Shipping Solutions Can Help
Navigating USMCA and other free trade agreements can be complex, especially with shifting trade policies. Shipping Solutions software simplifies the process by helping you determine whether your products qualify, generate accurate Certifications of Origin, and create other essential export documents.
By using Shipping Solutions, you can ensure compliance while saving time and effort. Learn more about how Shipping Solutions can help streamline your export documentation process today!
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This article was first published in May 2014 under the name When Should You Refuse to Complete the NAFTA Certificate of Origin? and has been updated to include current information about the USMCA, new links, and subtle formatting changes.
