United States President Donald Trump’s so-called "Liberation Day" introduced sweeping reciprocal tariffs on approximately 60 countries on April 2.

Canada, a major U.S. trading partner, was largely spared from those reciprocal tariffs thanks to the Canada-United States-Mexico Agreement (CUSMA) — a free trade agreement renegotiated and signed by the previous Trump administration in 2020.

Although it may appear Canada has avoided the worst of the tariff measures, other existing tariffs could still significantly impact Canadian trade with the U.S.

Currently, Canada faces other tariffs on its exports to the U.S., which Trump has linked to concerns over illicit drugs and immigrants crossing the border. Under these measures, the U.S. has imposed a 25 per cent tariff on non-CUSMA compliant goods. Canadian energy and potash exports that are not CUSMA-compliant have been hit with a 10 per cent tariff.

If the current tariffs related to fentanyl and migration are lifted, CUSMA-compliant goods would continue to enjoy preferential treatment, while non-compliant goods would then be subject to a 12 per cent reciprocal tariff.

What makes a product CUSMA-compliant?

Under CUSMA, a product is considered compliant if it originates from any of the three member countries: Canada, the U.S. or Mexico. This means the product satisfies the originating status according to the rules of origin criteria listed in the CUSMA agreement.

To be deemed originating, some of the criteria includes, for instance:

• The product is wholly produced in the territory of one of the member states.

• If the product is produced with non-originating materials, the regional value of content must not be less than product specific rules of origin.

• The product has undergone substantial........

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