A new report offers several theories for why more than 90 per cent of Canadian goods are entering the U.S. tariff-free despite data showing a much smaller share are compliant with the United States-Mexico-Canada Agreement (USMCA). (The Logic)
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A new report offers several theories for why more than 90 per cent of Canadian goods are entering the U.S. tariff-free despite data showing a much smaller share are compliant with the United States-Mexico-Canada Agreement (USMCA). (The Logic)
Talking point: U.S. trade data shows 56 per cent of imports from Canada were classified as USMCA-compliant in June—up from 38 per cent in 2024 after businesses rushed the paperwork needed to be exempt from fentanyl-related tariffs. Yet it also shows 92 per cent of Canadian goods entered duty-free in June 2025. The report points to an uptick in goods moving through Chapter 99—a part of the U.S. tariff schedule meant for temporary changes. Another explanation: “the fluidity and the degree of volatility in U.S. trade policy,” said Michael Davenport, senior economist at Oxford Economics. Statistics Canada does not track USMCA-compliance, but told The Logic it might do so after it finishes reviewing customs records that might “shed light” on the issue.
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