Overview

• Royal Bank of Canada analysis indicates only 38 percent of Canadian exports complied with USMCA rules in 2024, though up to 94 percent could be adjusted for origin requirements.
• About 90 percent of Canadian shipments now qualify for tariff-free entry under USMCA, prompting exporters to overhaul supply chains to avoid the 35 percent duty.
• Non-compliant goods continue to face a 35 percent baseline tariff alongside targeted levies of up to 50 percent on steel and aluminum and 10–25 percent on energy, petroleum and lumber.
• Prime Minister Mark Carney’s government has limited its response to select counter-tariffs aimed at U.S. sectors where they inflict maximum impact with minimal harm to Canada.
• High-level discussions are underway as both sides gear up for the formal USMCA review in July 2026, when rules-of-origin for autos and manufacturing may be renegotiated.