CUSMA duty charged anyway: why it happens

You make your product in Canada. CUSMA says qualifying Canadian goods enter the US duty-free. Your UPS invoice says otherwise. Both can be true at once, and the reason is procedural rather than mysterious.

Preferential treatment is claimed, not granted

CUSMA does not reclassify your goods as duty-free. It creates a preferential rate that the importer may claim, provided the goods meet the rule of origin and the claim is supported by a certification of origin containing the required data elements.

If no claim is made at entry, the goods are entered at the normal rate. Duty is assessed correctly, by the rules, on goods that were entitled to zero. Nothing in the system flags this, because from customs’ perspective nothing went wrong.

The five common causes

No certification travelled with the shipment. The commercial invoice your label tool generated has no origin certification statement on it.

The certification is incomplete. It is missing one of the required data elements, so the broker cannot rely on it.

The broker did not apply the preference. The data was present but the entry was filed without the claim.

The good does not actually qualify. Imported inputs mean the rule of origin was never satisfied, regardless of where final assembly happened.

Nobody knows which case applies, so the duty is assumed correct and paid.

Made in Canada is not the same as originating

This distinction costs brands real money. A good is originating under CUSMA when it meets the specific rule for its tariff classification. For goods wholly obtained or produced in Canada that is straightforward.

For goods containing imported materials it is not. Depending on the heading, the rule may require that the imported inputs undergo a specified tariff shift, or that a minimum share of value be regional. Sewing imported fabric in Montreal may or may not clear that bar, and the answer is per product, not per company.

What to do about it

Start by splitting your catalogue into qualifying, non-qualifying and unknown, with reasoning attached. Everything else depends on this.

For the qualifying set, issue a properly made out certification and get it onto every shipment automatically rather than on request.

Then check your invoices again in thirty days. If duty is still appearing on qualifying goods, the failure is at entry and belongs with the broker — now a conversation you can have with evidence.

Finally, look backward. Duty paid in error on qualifying goods is often recoverable through a post-entry claim within the applicable window.