CUSMA Joint Review Kicked Off This Week — What Import Managers Actually Need to Watch

The Joint Review Is On

The Advisory Committee on Canada–U.S. Economic Relations met this week to brief stakeholders ahead of the CUSMA joint review. Canada’s negotiating team has been meeting counterparts in Washington and Mexico City. The six-year review window opens July 2026, but the prep work is already live.

For import managers filing CADs under CUSMA preference claims, three issues came up that have immediate operational weight: the continuation of U.S. Section 232 tariffs on Canadian steel and aluminum, the prospect of new Section 301 tariffs, and the review of CUSMA itself. None of these are abstract trade-policy debates. All three touch the duty math on your next commercial accounting declaration.

Section 232 Steel and Aluminum Tariffs Are Still There

The U.S. imposed Section 232 national-security tariffs on Canadian steel (25%) and aluminum (10%) in 2018. Those tariffs were paused in 2019, reinstated in 2020, paused again under a quota-and-tariff-rate framework in 2021, and as of this week remain partially in force depending on product category and volume.

If you’re importing U.S.-origin steel or aluminum components into Canada and then re-exporting finished goods back to the U.S., the tariff doesn’t hit you directly. But if your U.S. supplier is passing through the cost of the tariff on Canadian-origin input material, you see it in the transfer price. That inflated FOB value becomes your VFD (Value for Duty) base when you file the CAD, and your GST calculation follows. The tariff shows up twice.

CBSA doesn’t adjust your declared value downward to strip out foreign tariffs paid by your supplier. You report what you paid. If the vendor invoice line says “Section 232 surcharge,” that’s part of the price of the goods. It goes into Box 24 of the CAD. There’s no deduction for it under the Customs Act valuation rules.

The committee’s discussion this week confirmed that getting Section 232 tariffs lifted remains a Canadian negotiating priority, but there’s no timeline. For now, treat them as permanent when you’re budgeting landed cost on any U.S.-origin steel or aluminum item with a Canadian input somewhere in the supply chain.

Section 301 Tariffs Are a Moving Target

The U.S. has floated new Section 301 tariff proposals covering a wider set of goods. These would be separate from the China-focused List 1–4 tariffs already in place. The committee discussed the implications for Canadian exporters, but the mirror issue for Canadian importers is just as real.

If you’re importing goods from the U.S. that contain Chinese components, and those components were already subject to Section 301 duties when they entered the U.S., your U.S. supplier may have absorbed that cost or passed it through. Either way, it’s baked into your transaction value. When you claim CUSMA preference on the finished good coming into Canada, you need to be sure the good actually qualifies.

CUSMA origin rules are product-specific. Most HS chapters require a tariff shift, a regional value content (RVC) threshold, or both. If your U.S. supplier is using non-originating Chinese inputs, the RVC calculation has to clear the hurdle (usually net-cost or transaction-value method, depending on the good). If it doesn’t, you can’t claim preference, and the MFN rate applies. That’s fine if you catch it at filing. It’s a problem if CBSA catches it eighteen months later during a verification request under D11-4-18.

The risk isn’t the tariff itself. The risk is that your U.S. vendor gave you a CUSMA certificate of origin that was true when signed but becomes false after a supplier change, and you keep using it. CBSA’s origin verification group has been running more random audits since CARM went live. If they send you a CCS-2 (request for information) and you can’t substantiate the claim, you’re liable for the duties from the date of import plus interest. If it looks like negligence, AMPS penalties follow.

Our compliance team sees this on Mexican-origin goods all the time. It’s starting to show up on U.S. files now too. If your supplier changed their input sourcing in the last twelve months, ask for a new certificate. Don’t assume the old one still works.

The CUSMA Review Itself

The agreement requires a joint review every six years. The first one opens in July 2026, and either party can choose not to renew. If that happens, the agreement continues for another sixteen years unless a party withdraws.

The committee discussion this week didn’t surface any sign that Canada, the U.S., or Mexico intends to pull out. But all three want amendments. Canada wants the Section 232 tariffs addressed in the text. The U.S. wants tighter rules of origin on automotive and stricter labor-value enforcement. Mexico wants certainty on energy provisions.

For import managers, the automotive ROO (rules of origin) discussion is the one to watch. CUSMA tightened the RVC thresholds and added a labor-value content (LVC) rule that requires a percentage of production to happen in facilities paying at least USD 16/hour. Compliance with LVC has been uneven. If the U.S. pushes for stricter verification or higher thresholds during the review, automotive parts that qualify today might not qualify in 2027.

If you’re importing auto parts or vehicles under CUSMA preference, this is the year to audit your certificates of origin and your supplier declarations. If your Tier 1 supplier in Michigan is relying on a Tier 2 supplier in Guanajuato for stampings, and that facility isn’t meeting the LVC rule, the cert is wrong. CBSA won’t flag it at release, because CUSMA claims are accepted on a self-assessment basis. They’ll flag it when they run the verification, and by then you’ve filed two years of CADs.

We run origin audits for clients every quarter. Most of the time the certs are fine. When they’re not, it’s usually LVC on automotive or a tariff-shift failure on textiles. Fixing it before CBSA asks costs you nothing. Fixing it after costs you the duties, interest, and the broker time to prepare the voluntary disclosure.

What Changed This Week

Nothing operational. The committee meeting was a briefing, not a negotiation. The Section 232 tariffs are still there. The Section 301 proposals are still proposals. The CUSMA review timeline is unchanged.

What did shift is the level of certainty that the review will focus on rules of origin, labor value, and tariff disputes. If you’re filing CUSMA preference claims on high-volume SKU families, now is the time to confirm that your supplier certs and your internal RVC calculations are defensible. CBSA has twelve months after the CAD is filed to run a compliance verification without needing cause. After that, they need a reason. But if the reason is a random audit tied to the CUSMA review, the twelve-month clock doesn’t help you.

If your CUSMA preference claims sit on older certificates or supplier declarations that haven’t been refreshed since 2020, pull the file and walk through the RVC math again. If the numbers don’t reconcile, talk to a broker before the next verification letter shows up.

Source: CSCB