Canadian Freight Forwarders Navigate Tariff Uncertainty as Importers Rethink US Supply Chains

Key Takeaways

• Switching from US suppliers to direct overseas sourcing changes CBSA origin claims, duty rates, and CAD filing requirements under CARM.
• CETA and CPTPP can eliminate or reduce duty on European and Asia-Pacific imports, but documentation requirements are more complex than CUSMA claims.
• RPP bond sizing must be recalculated when moving from zero-duty CUSMA goods to dutiable MFN or SIMA-subject imports.
• Freight forwarders should model landed costs (product + freight + duty + brokerage) across origin scenarios before importers commit to supplier changes.

Canadian Importers Ask: Should We Route Around the US?

The latest round of Canada-US trade friction has logistics inboxes full of the same question: if we’re currently importing through a US distributor or transshipment point, what does it take to source directly from overseas?

For a Canadian freight forwarder, that question unpacks into CBSA clearance procedures, origin certification under CUSMA vs CETA vs CPTPP, and Commercial Accounting Declaration (CAD) filing that looks very different when the supplier country changes. The tariff headlines are diplomatic theater. The actual work is retooling customs documentation for a new supply chain.

What Changes at the Border

Switching from a US supplier to a direct overseas vendor is not just a purchasing decision. It rewrites the customs clearance file.

If you’ve been importing finished goods manufactured in the US and claimed CUSMA preferential duty (zero-rated), those goods came in with a CUSMA Certificate of Origin and cleared at 0% MFN duty. Move that same product category to a Chinese or European supplier, and the story splits:

• Chinese origin: MFN duty rates under Canada’s WTO commitments. Depending on the HS 6-digit classification, that can be 6.5% to 18%. If the goods are subject to Special Import Measures Act (SIMA) findings, you also pay antidumping or countervailing duties on top of MFN.
• European origin: If the supplier qualifies under CETA, you file a CETA origin declaration and the goods clear duty-free or at a reduced rate. CETA has been in force since 2017, and most tariff lines are now eliminated per the staged tariff schedule.

The freight forwarder’s job is to map that out before the first container ships, not after it arrives at the port.

CARM Filing Complexity Goes Up

CARM Phase 2 Release 3 went live in 2024, and the Commercial Accounting Declaration replaced the old B3 form. One of the quiet changes: origin claim documentation is now attached at the line-item level in the CAD, and CBSA’s risk-scoring engine flags mismatches between declared origin and supplier address far more aggressively than the old paper trail.

If you’re filing a CAD with a CETA claim, you need the supplier’s EORI number, the origin statement text (per CETA Article 23.4), and evidence that the goods meet the product-specific rule of origin for that HS code. That’s more documentation than a CUSMA claim, and it has to be on file before you request release prior to payment (RPP).

Most mid-market importers don’t have that documentation ready on day one. The freight forwarder either waits for it (which pushes clearance by 24 to 48 hours), or files the CAD at MFN duty and amends it later under the 90-day correction window. Both options cost money.

RPP Bond Exposure and Duty Volatility

RPP bonds are sized to cover the importer’s maximum single-transaction duty and GST exposure. If you’ve been clearing $50,000 shipments at 0% CUSMA duty, your bond reflects that. Switch to a Chinese supplier at 12% MFN duty, and the single-transaction exposure jumps to $6,000 in duty plus 5% GST. Your existing bond may no longer cover it.

CBSA requires importers to post financial security of at least 125% of estimated annual duty and tax. Per D17-1-10, the minimum RPP surety bond is $25,000, but most active importers carry $100,000 to $500,000 depending on volume. If you’re moving from zero-duty CUSMA goods to dutiable MFN or SIMA-subject goods, that bond needs to be recalculated.

We’ve seen importers discover this gap only when CBSA suspends RPP privileges after a CAD posts with insufficient security. At that point, the container is sitting in a bonded warehouse and won’t release until the shortfall is covered.

How Freight Forwarders Model Direct Overseas Routing

The operational question behind all of this: is it actually simpler to import directly from China or the EU than to buy from a US-based distributor who stocks the same goods?

At the border, the answer depends on documentation and duty. If the US distributor is selling goods of Chinese origin, you’re still filing a CAD with Chinese origin and paying MFN duty. The only thing the US intermediary adds is handling and margin. You don’t get CUSMA treatment unless the goods are substantially transformed in the US to the point where they qualify for US origin (which is rare for distributors who are just warehousing and repackaging).

On the other hand, if the US distributor is your contract manufacturer and the goods are genuinely made in the US, CUSMA preferential duty is real savings. Walking away from that to chase a lower supplier price in Asia makes sense only if the landed cost (product + ocean freight + CBSA duty + brokerage) is still lower. That math is different for every HS code.

A competent freight forwarder will run that landed-cost model before you commit to a PO. If the math doesn’t close, the supply chain change doesn’t happen.

What We’re Telling Clients Right Now

Tariff uncertainty is not new. It’s a permanent feature of cross-border trade. The useful response is not to wait for diplomatic clarity (which may never come), but to model your clearance costs under different scenarios and know which supply chain pivots make sense.

If you’re currently sourcing from the US and wondering whether direct overseas makes sense, the first step is an HS classification review and a duty comparison across origin scenarios. We run that analysis routinely for importers looking at supplier changes. Most of the time, the answer is not obvious until you see the actual CAD line-item breakdown.

If your inbound clearance assumptions are still based on pre-CARM procedures or you haven’t revisited your RPP bond since switching suppliers, get in touch.

Frequently Asked Questions

What is a Commercial Accounting Declaration (CAD) under CARM?

The CAD replaced the old B3 form in 2024 under CARM Phase 2 Release 3. It’s the electronic filing that declares goods to CBSA, calculates duty and GST, and requests release. Every commercial import into Canada requires a CAD, filed by the importer’s customs broker via the CARM Client Portal.

How does CETA preferential duty work for Canadian importers?

CETA eliminates or reduces tariffs on most goods originating in the EU. Per CBSA’s staged tariff schedule, approximately 98% of EU tariff lines are now duty-free. To claim CETA treatment, the CAD must include the supplier’s origin statement (per CETA Article 23.4) and evidence that the goods meet the product-specific rule of origin for that HS code.

What is the minimum RPP bond amount required by CBSA?

Per CBSA D17-1-10, the minimum Release Prior to Payment surety bond is CAD $25,000. However, most active importers post $100,000 to $500,000 in financial security to cover their maximum single-transaction duty and GST exposure (125% of estimated annual duty and tax).

Do I pay CUSMA duty if I buy from a US distributor selling Chinese-made goods?

No. CUSMA preferential duty applies only if the goods originate in the US (or Canada/Mexico). If a US distributor is reselling goods manufactured in China, you still declare Chinese origin on the CAD and pay MFN duty rates. The US intermediary does not change the country of origin unless the goods are substantially transformed in the US.

How long do I have to correct a CAD if I filed the wrong origin claim?

CBSA allows importers to request a correction within 90 days of the original CAD acceptance date. If you filed at MFN duty but later obtained the CETA origin documentation, you can file a correction and request a refund of overpaid duty. After 90 days, you must file a formal drawback claim under the Customs Act.

What is SIMA and how does it affect import duty?

The Special Import Measures Act (SIMA) imposes antidumping (AD) or countervailing (CVD) duties on goods that the CITT has found to be dumped or subsidized and causing injury to Canadian industry. SIMA duties are charged on top of MFN duty and can range from 5% to over 200% depending on the product and exporter.

Source: The Loadstar