On Tuesday, President Trump imposed 25% tariffs on imports from Canada and Mexico, which had been paused from early February while both countries worked to address the administration’s concerns with illegal immigration and fentanyl imports. Then on Thursday, the President granted Mexico and Canada a 30-day tariff reprieve that only applies to products that “are subject to the United States, Mexico, Canada Agreement (USMCA).” To qualify, a good must meet the definition of “originating goods” under USMCA. The criteria for such are outlined below and specified in Section 202 (page 15) of the USMCA Implementation Act of 2020.
Originating Goods:
- The good is wholly obtained or produced entirely in the U.S., Canada, and/or Mexico.
- This means the good has been extracted from or grown/raised (e.g., agricultural goods and seafood) in one of these countries.
- The good is produced entirely in the U.S., Canada, and/or Mexico, exclusively from originating materials.
- This means the goods are produced using materials that themselves originate from one of these countries.
- The good is entirely produced in the U.S., Canada, and/or Mexico using materials from other countries as long as the good meets all applicable requirements under the product-specific rules outlined in Annex 4-B of the USMCA.
- Annex 4-B defines the rules applicable to each product, including the “tariff shift” test and the “regional value content” test.
- The 6-digit Harmonized Tariff Schedule code (“HTSUS”) is required to determine the appropriate product-specific rule to apply.
Largely, composite panels and products made with composite panels that are manufactured in North America and adhere to the definitions above will qualify as “originating goods” and therefore be “subject to the USMCA” and be exempt from the 25% tariffs. The key criteria is that the product is made in North America with North American materials or inputs. While this seems straightforward, members are encouraged to consult with company counsel to address individual circumstances. When the 30-day pause ends in early April, the Trump administration is expected to impose a series of reciprocal tariffs, details to be determined.
On Tuesday, Canadian Prime Minister Trudeau responded by imposing 25% tariffs on C$30 billion of imports from the U.S. to Canada. The list of products includes particleboard (HTSUS 4410.11) and MDF (HTSUS 4411.12). It is not clear when and if these tariffs will be withdrawn.
CPA has compiled additional data to provide members with information on the flow of composite panels between the U.S. and Canada. The new charts outline U.S. and Canadian-produced particleboard, MDF, and TFL shipments based on country of origin. CPA will continue to include these charts as part of its regular Snapshot and TFL reports going forward to track potential impacts from tariffs. See Destination Shipments by Country of Origin and Products Covered under Canadian Tariffs. More Info: Andy O’Hare
