Customs Tweaks NAFTA 2.0 Rules for Cars and Clothes
Published Date: 1/17/2025
Rule
Summary
Starting March 18, 2025, new rules kick in to make trading textiles, apparel, and cars between the U.S., Mexico, and Canada smoother under the USMCA deal. These rules update how customs handles tariffs, paperwork, and certifications, with some vehicle-related certifications required by May 19, 2025. Businesses involved in these goods should get ready for clearer guidelines and new deadlines that could save time and money.
Analyzed Economic Effects
6 provisions identified: 1 benefits, 4 costs, 1 mixed.
Three Vehicle Certifications Required
A covered vehicle (passenger vehicle, light truck, or heavy truck) is eligible for USMCA preferential tariff treatment only if the producer submits three properly filed vehicle certifications to CBP: the labor value content (LVC) certification, the steel purchasing certification, and the aluminum purchasing certification. CBP must ensure these certifications contain no omissions or errors before they are considered properly filed.
70% Steel and Aluminum Sourcing Rule
For a covered vehicle to qualify as originating, the producer generally must ensure that at least 70 percent, by value, of its corporate-level purchases of steel are originating goods and at least 70 percent, by value, of its corporate-level purchases of aluminum are originating goods during the applicable calculation period.
Alternative Staging Regime and Liability
Vehicle producers may petition USTR for an alternative staging regime to get more time or different phase-ins; passenger vehicles and light trucks may use such regimes for periods ending no later than five years after entry into force (July 1, 2025), and heavy trucks no later than seven years after entry into force (July 1, 2027). USTR will publish an approved list of producers; if a producer later fails to meet its regime's requirements, USTR can remove the producer and importers may become liable for duties, taxes, and fees that would have applied plus interest.
New USMCA Compliance Dates
The new CBP rules take effect on March 18, 2025. Vehicle-related certifications (labor value content, steel purchasing, and aluminum purchasing) are required only for certifications submitted to CBP on or after May 19, 2025.
Tariff Preference Levels for Textiles
The rule adds Tariff Preference Levels (TPLs) that let specified quantities of certain non-originating textile and apparel goods claim USMCA preferential tariff treatment up to annual limits measured in square meter equivalents (SME). Imports under a TPL are managed first-come, first-served, may be claimed for at least one year after import if limits remain, and goods entered under TPLs are exempt from merchandise processing fees; CBP will use a certificate of eligibility to administer TPLs.
Textile Site Visits and Verifications
CBP may perform verifications or site visits of textile and apparel exporters or producers to check whether goods qualify for USMCA preferential treatment. A site visit can request access to records and facilities, may be conducted without prior notice to the exporter or producer (though the visiting country must notify the host country 20 days before the first visit), and denial of access or findings can lead to denial or withholding of preferential treatment.
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