USMCA Rules of Origin: How to Qualify for Preferential Rates

What Is USMCA and Why Origin Matters

The United States-Mexico-Canada Agreement (USMCA), which replaced NAFTA on July 1, 2020, is the trade agreement governing preferential tariff treatment for goods traded among the three North American countries. If your product qualifies as originating under USMCA, you can import it duty-free or at a significantly reduced rate compared to the standard Column 1 General rate. However, qualification is not automatic — you must demonstrate that the product meets specific rules of origin defined in the agreement.

The Three Main Origin Criteria

• Wholly Obtained or Produced: Goods that are entirely grown, harvested, extracted, or produced within the USMCA territory — such as agricultural products, minerals, or fish caught in territorial waters.
• Tariff Shift: Goods manufactured using non-originating materials, where the manufacturing process causes the product to change its tariff classification (e.g., from one HS chapter to another) as specified in the product-specific rules.
• Regional Value Content (RVC): Goods that meet a minimum percentage of North American value, calculated using either the Transaction Value method (typically 75%) or the Net Cost method (typically 65%).

Understanding Product-Specific Rules

USMCA Annex 4-B contains product-specific rules for every tariff heading. Each rule specifies which origin criteria apply to that product — a tariff shift requirement, an RVC threshold, or a combination. For example, a furniture product might require a change from any other chapter (a Chapter-level tariff shift), while an automotive part might require both a tariff shift and 75% RVC under the transaction value method. You must review the specific rule for your product's HTS heading before making an origin determination.

How to Complete the Certification of Origin

Unlike NAFTA, which required a specific form (CBP Form 434), USMCA uses a flexible certification format. The certification can be included on the commercial invoice, attached as a separate document, or submitted electronically — as long as it contains the nine required data elements: certifier information, exporter and producer details, product description, HTS code, origin criterion, blanket period (if applicable), and the authorized signature. Any importer, exporter, or producer can complete the certification.

Record-Keeping Requirements

Importers claiming USMCA preferential treatment must retain all records supporting the origin claim for a minimum of five years from the date of importation. This includes the certification of origin, bills of material, production records, purchase invoices for originating and non-originating inputs, and any RVC calculations. CBP can request verification at any time, and failure to produce supporting records can result in denial of preferential treatment and assessment of full duties plus interest.