CUSMA Annual Review Starts: What Canadian Importers Should Watch in 2025

Key Takeaways

• CUSMA remains in force through at least 2036, but the first annual review is now active and may produce sectoral rule-of-origin amendments before July 2026.
• Importers claiming CUSMA preferential duty treatment should audit their current origin certifications and ensure CAD filing fields match certificate scope.
• CBSA verification requests targeting CUSMA claims have increased 18% year-over-year; clean documentation trails matter more than ever.
• If review negotiations adjust textile, automotive, or steel annexes, affected importers may face retroactive duty exposure unless they file correction CADs within 90 days of rule changes.

CUSMA stays in place, but the first review is underway

The United States declined automatic extension of CUSMA at the six-year mark, so Canada, the U.S., and Mexico are now in the first formal annual review process under Article 34.7. The agreement remains in force through at least 2036, and nothing changes on the border tomorrow morning. Still, importers claiming preferential duty treatment under CUSMA should understand what review negotiations can and cannot touch, and how to prepare if sectoral rules shift over the next twelve months.

This isn’t a renegotiation of the entire agreement. The joint review allows any party to propose amendments to annexes, origin rules, or dispute-settlement provisions. If consensus emerges, the three countries publish updated text and give stakeholders time to adjust documentation. If talks stall, the status quo continues. Either way, CBSA will keep processing CADs under current CUSMA rules until new ones take effect.

What the review process means for origin documentation

Most Canadian importers file hundreds or thousands of Commercial Accounting Declarations every month via the CARM Client Portal, and a large share claim CUSMA preferential treatment to avoid Most-Favored-Nation duty rates. Those claims rest on origin certifications provided by the supplier, either on commercial invoices or in standalone declarations. CBSA can verify any CUSMA claim within four years of the date of accounting, and verification requests have climbed steadily since CARM Phase 2 went live.

If review negotiations produce amended rules for a specific sector, two things happen. First, CBSA publishes a revised D-memorandum explaining the new origin criteria and the effective date. Second, importers have a 90-day window after rule changes to file correction CADs if their existing entries no longer qualify under the tighter standard. Miss that window, and you risk duty recovery plus interest stretching back to the original entry date.

We see this play out most often in automotive and textile categories, where regional value content thresholds and yarn-forward provisions leave narrow margins for error. If you’re claiming CUSMA preference on vehicles, auto parts, or apparel, now is a good time to pull a sample of your supplier certifications and confirm that the math actually supports the claim. CBSA verification requests rose 18% in fiscal 2023–24 compared to the prior year, per the Departmental Results Report, and a review cycle tends to sharpen enforcement focus.

Sectors likely to draw attention in 2025–26 negotiations

Automotive regional value content, steel and aluminum melt-and-pour rules, and textile yarn-forward provisions have been negotiation flashpoints since CUSMA took effect in July 2020. U.S. trade representatives have signaled interest in tightening automotive content calculations, particularly around battery components and semiconductors. Canada and Mexico both want more flexibility in steel and aluminum sourcing for downstream manufacturers.

If you import vehicles, parts, or primary metal products and claim CUSMA preference, expect CBSA to scrutinize origin certifications more closely during the review period. That doesn’t mean your current claims are wrong, but it does mean you should have supplier affidavits, bills of materials, and production records organized before a verification letter lands in your CARM Client Portal inbox. CBSA gives you 30 days to respond with supporting documents. If you can’t substantiate the claim, the agency will deny preference, assess MFN duty, and charge interest from the original entry date. AMPS penalties start at $400 per contravention for unsubstantiated preference claims under the Master Penalty Document.

Textile and apparel importers face similar risk. CUSMA’s yarn-forward rule requires that yarn production and all subsequent manufacturing steps occur in a CUSMA country. A single offshore weaving stage can disqualify the entire garment. We routinely audit client certifications and find vague supplier language that doesn’t specify where spinning and weaving happened. If review negotiations tighten textile annexes, those gaps will cost you duty on every affected entry filed in the prior four years.

How to prepare while review talks continue

First, pull a sample of your high-value CUSMA preference claims from the past twelve months. Cross-check the HS 6-digit classification on each CAD against the product description in the supplier’s origin certification. Mismatches are common, and CBSA verifiers will catch them.

Second, confirm that your supplier’s certification covers the full claim period. CUSMA allows blanket certifications valid for up to twelve months, but many suppliers issue rolling 90-day letters and forget to renew. If your CAD filing date falls outside the certification window, CBSA will deny preference even if the goods themselves qualify.

Third, review your RPP bond sizing. If a sectoral rule change triggers duty reassessment on a batch of entries, your release prior to payment bond needs enough headroom to cover the shortfall while you file corrections. We see bond utilization spike during verification cycles, and clients who run out of capacity face cargo holds until they post additional financial security with CBSA.

Fourth, talk to your customs broker about proactive origin audits before CBSA initiates a verification. A voluntary audit lets you identify and correct weak certifications on your own timeline. If CBSA opens a formal verification first, you’re on the clock and any errors you discover mid-process still result in duty recovery and potential penalties.

Finally, monitor Global Affairs Canada and CBSA bulletins for updates on review negotiations. If a sectoral annex changes, you’ll have 90 days to assess exposure and file correction CADs. That’s a tight window if you import high volumes across multiple HS codes. Clients who track rule changes in real time and pre-stage documentation adjustments come out ahead. Clients who wait for a CBSA demand letter spend months unwinding entries and posting bonds to release held shipments.

Warehouse and logistics continuity during the review

CUSMA review negotiations won’t disrupt daily release procedures or drayage schedules. CAD acceptance timelines, PARS processing, and sufferance warehouse clearance all continue under existing protocols. If you store U.S.-origin goods at a bonded facility while awaiting final sale, the duty deferral mechanics stay the same regardless of review outcomes.

That said, importers moving high volumes of CUSMA-eligible goods should coordinate with their warehouse partner to flag any entries that might require amended CADs if sectoral rules shift. FENGYE LOGISTICS runs daily reconciliation between inbound container receipts and CBSA release records, so if a correction CAD changes the duty liability on a pallet that’s already in racking, the billing adjustment flows through automatically. Importers who split brokerage and warehousing across separate vendors often find out about duty reassessments weeks after the goods have shipped to the end customer, and then spend time reconciling landed cost vs. invoiced cost with no inventory to physically verify.

Cross-dock and transload operations are even less affected. If you’re bringing U.S.-origin LTL freight into Montreal for consolidation and outbound distribution across Eastern Canada, CUSMA preference claims on those shipments are filed at first point of entry. Review negotiations don’t change the timeline between border release and dock availability. The only scenario where review uncertainty might matter is if you’re holding back on large capital purchases of U.S.-made equipment pending clarity on tariff treatment. In that case, your duty planning conversation should include fallback MFN rates and potential CETA sourcing alternatives if CUSMA rules tighten for your HS code.

What happens if talks produce no consensus

If the three countries can’t agree on amendments, CUSMA continues as written. Article 34.7 triggers another joint review in July 2029, and every three years after that. The agreement stays in force through 2036 regardless of review outcomes, and importers keep claiming preference under current rules. The only termination path is if one party formally declines extension at a future review, which would trigger a ten-year wind-down period.

For working brokers and import managers, the 2025–26 review is a documentation audit opportunity disguised as a trade policy process. CBSA verification activity is already elevated, and any rule changes that emerge from negotiations will reset the baseline for what constitutes adequate substantiation. Clients who treat this cycle as a chance to clean up supplier certifications and tighten origin audit trails will have fewer surprises when the next AMPS contravention notice arrives.

If your current CUSMA preference volume sits above a few hundred entries per year, and you haven’t pulled a statistically valid sample for internal review in the past twelve months, that’s the first call to make. We file CADs daily against supplier certifications that wouldn’t survive a CBSA origin questionnaire, and the time to fix them is before the verification letter shows up in your CARM portal.

Get in touch if you want to walk through a CUSMA origin audit before CBSA opens a file.

Frequently Asked Questions

What is the CUSMA annual review process?

Under Article 34.7 of the Canada-United States-Mexico Agreement, any party can request consultations during a joint review at the six-year mark (July 2026). The U.S. declined automatic extension, so all three countries will now assess whether sectoral annexes, origin rules, or dispute-settlement provisions need amendment. The agreement stays in force regardless of review outcomes.

How does the CUSMA review affect my CAD filings today?

It doesn’t change current filing obligations. You still claim CUSMA preference by entering the appropriate tariff treatment code on the Commercial Accounting Declaration via the CARM Client Portal, backed by a valid origin certification. If review negotiations produce new rules, CBSA will publish amended D-memoranda and give importers time to adjust.

Can CBSA audit my CUSMA origin claims retroactively if rules change?

CBSA can verify any CUSMA claim filed within the past four years, per Customs Act section 42. If a review amendment tightens rules, CBSA typically applies the new standard prospectively. However, if your existing certifications don’t support the claim under current rules, you risk duty recovery plus AMPS penalties starting at $400 per contravention under the Master Penalty Document.

What sectors are most likely to see rule changes in the 2025–26 review?

Automotive regional value content, textile yarn-forward provisions, and steel/aluminum melt-and-pour rules have been recurring negotiation topics since CUSMA took effect in July 2020. Importers in those categories should monitor Global Affairs Canada bulletins and talk to their broker about proactive origin audits.

Should I prepare documentation now if I claim CUSMA preference?

Yes. CBSA verification requests rose 18% in fiscal 2023–24 compared to the prior year, according to the CBSA Departmental Results Report. Gather supplier affidavits, bills of materials, and production records before a verification letter arrives. If you can’t substantiate the claim within the 30-day response window, CBSA will deny preference and assess MFN duty plus interest.

How long does a CUSMA verification typically take?

CBSA aims to complete origin verifications within 120 days of the initial request. Complex cases involving multiple tiers of suppliers or automotive content calculations can stretch to nine months. During that period, release prior to payment continues as usual if your RPP bond covers the potential duty shortfall.

What happens if CUSMA isn’t extended in 2036?

Article 34.7 triggers another joint review in July 2029, and every three years thereafter. If any party declines extension at a future review, the agreement terminates ten years after that notice. For now, CUSMA is locked in through 2036 with no termination risk.

Source: Supply Chain Dive