The USMCA Trade Agreement Can Be a Big Plus in Sourcing

While sourcing from North America remains a moving target, the existing trade agreement amongst the US, Mexico and Canada might be able to solve some of your sourcing needs.

Trying to sort out the ever-changing tariffs situation is not an easy task to be sure. The rules keep changing at the drop of a social media post and the plans you made on Monday might be worthless by mid-week.

But lost in all the headlines for many people is an existing trade agreement that has was negotiated between the U.S., Mexico and Canada in 2018 and signed into law at the end of the first Trump presidency in January of 2020. It’s a complicated document and it is far from all-encompassing but for some companies it could offer an amazing opportunity.

The agreement was further updated earlier this year under the second Trump administration and a webinar at https://www.cbp.gov/medialibrary/assets/video/61276 provides details on those changes in a rather bureaucratic fashion that may not answer all your questions regarding trade.

There are still tariffs on importing goods into the U.S. but they are far less than recently enacted rates and products including under the USMCA agreement are not subject to any additional duties that might be put into place under future political policies. As such it makes sourcing from Mexico and Canada economically viable in many cases.

And while the USMCA -- it’s called CUSMA in Canada and T-MEC in Mexico -- focuses primarily on automotive and industrial products it does also cover textiles and some apparel categories, including fabrics, yarns, bags, luggage and umbrellas among other specific products.

If you are interested in learning more about doing business under the USMCA statues, a good source of information is the webpage from the government agency, U.S. Customs and Border Protection, that administers the program: https://www.cbp.gov/trade/priority-issues/trade-agreements/USMCA. Note that depending on the status of the government shutdown, the site may not be able to respond to questions from users.

The USMCA is not the answer to all sourcing needs for North America but it can be a true asset for some companies in some situations.