Leveraging USMCA Exemptions to Offset Rising Tariffs in 2025

As U.S. tariffs on critical materials like steel, aluminum, and copper escalate, businesses are turning to the United States-Mexico-Canada Agreement (USMCA) to mitigate costs and strengthen supply chains. The latest data from U.S. Customs and Border Protection (CBP), as highlighted in Gain Consulting’s August 27, 2025, white paper, shows a surge in USMCA-compliant imports: 81% of goods from Canada and 77% from Mexico in June 2025, up from 56% and 42% in May, respectively. With tariff hikes, including a 50% duty expansion on over 400 product types effective August 18, 2025, leveraging USMCA exemptions is critical for cost savings. At Gain Consulting, we’re exploring how businesses can capitalize on these opportunities to navigate the challenging trade landscape.

The Surge in USMCA Compliance

The USMCA, effective since July 2020, offers duty-free or reduced-duty access for goods meeting North American rules-of-origin criteria, making it a vital tool against rising tariffs. In 2024, $406.7 billion in imports from Canada and Mexico claimed USMCA preferences, primarily in automotive, oil and gas, and machinery sectors, while $509.7 billion did not—often due to low most-favored-nation (MFN) rates or reliance on the now-defunct de minimis exemption (ended August 29, 2025). Fitch Ratings projects compliance rates to climb to 89% for Canada and 83% for Mexico in 2025, driven by tariff pressures, including 15% duties on EU goods and 50% on Brazilian products containing steel, aluminum, or copper.

The August 18 tariff expansion, targeting 400 additional harmonized tariff (HT) codes, has intensified the shift toward USMCA. Third-party logistics (3PL) providers report a spike in inquiries as businesses seek to offset costs on metal-containing products like aluminum cans, appliances, and vehicle parts, where duties are assessed on metal content or the entire product value if undetermined.

Benefits of USMCA Exemptions

Adopting USMCA preferences delivers significant advantages:

• Cost Savings: Duty-free treatment for qualifying goods offsets MFN and Section 301 tariffs on Chinese goods, preserving profit margins.

• Supply Chain Resilience: Encourages nearshoring to Canada and Mexico, reducing reliance on volatile global suppliers.

• Competitive Pricing: Enables businesses to offer lower prices, appealing to cost-conscious consumers in a market wary of tariff-driven price hikes.

• Market Access: Strengthens North American trade flows, particularly in automotive and manufacturing sectors.

Challenges to Overcome

Despite its benefits, USMCA compliance presents hurdles:

• Administrative Complexity: Rules-of-origin calculations, requiring 60%–75% regional value content (RVC), demand detailed supplier data and shipment-level certifications.

• Documentation Burden: Importers must retain bills of materials and cost analyses for five years, risking audits and penalties for non-compliance.

• Limited Scope: USMCA does not offset Section 232 or anti-dumping/countervailing duties (AD/CVD), requiring a nuanced tariff strategy.

Strategic Recommendations

To unlock USMCA’s cost-saving potential, Gain Consulting recommends:

• Conduct a Supply Chain Audit: Identify imports eligible for USMCA, focusing on metal-containing products affected by the August 18 tariff expansion.

• Invest in Compliance Tools: Use software to streamline rules-of-origin calculations and partner with experts to manage documentation.

• Engage Suppliers: Secure certificates from North American partners to ensure seamless certifications.

• Monitor Tariff Developments: Stay updated on HT code changes and integrate USMCA into broader trade strategies, especially with disruptions like the suspension of Deutsche Post and DHL Parcel Germany services to the U.S. reported on August 22, 2025.

• Explore Intermodal Options: Leverage Union Pacific’s Inland Empire-to-Chicago intermodal service (launched September 3, 2025) for cost-effective North American freight movement.

How Gain Consulting Can Help

At Gain Consulting, we specialize in helping businesses navigate complex trade environments. Our team can conduct USMCA eligibility audits, streamline compliance processes, and optimize supply chain strategies to maximize cost savings. Whether you’re adjusting to new tariffs, managing documentation, or exploring intermodal solutions, we’re here to ensure your operations remain resilient and competitive.

Looking Ahead

The surge in USMCA-compliant imports—81% from Canada and 77% from Mexico in June 2025—underscores the agreement’s growing role in offsetting tariff pressures. With $509.7 billion in untapped import opportunities and rising compliance rates projected for 2025, now is the time to act.

Contact Gain Consulting today to learn how we can help you leverage USMCA exemptions, reduce costs, and strengthen your North American supply chain in this dynamic trade landscape.

Source: Gain Consulting White Paper, “Navigating Rising Tariffs: Leveraging USMCA Exemptions for Cost Savings in North American Supply Chains,” August 27, 2025; additional insights from FreightWaves, Cass Information Systems, and BTS, August 2025