Highlights of the USMCA deal

Did you hear about the new USMCA?

President Trump recently signed legislation to implement a revamped version of the U.S.-Mexico-Canada Agreement (USMCA) that was originally drafted in 2018.

Once in effect*, the USMCA will replace the North American Free Trade Agreement (NAFTA).

Key highlights of the deal

Below are a few key highlights of this new deal.

• Stronger protection and enforcement of intellectual property (IP) rights
• Prohibits tariffs on digital products and allows data to flow freely across borders
• US farmers will gain increased access to the Canadian dairy market
• 75% of a car must be manufactured within North America, so less parts will be imported cheaply from other countries like China

New de minimis values

For Canada

• The new tax de minimis value will go up to $40 CAD (previously $20 CAD).
• The new duty de minimis value will go up to $150 CAD (previously $20 CAD).

For Mexico

• The tax de minimis value will stay the same at $50 USD.
• The duty de minimis value will go up to $117 USD (previously $50 USD).

De minimis for postal shipments

The new de minimis values will not apply to postal shipments, which will remain unchanged at the de minimis values of $20 CAD for duty and tax in Canada and $50 USD for duty and tax in Mexico.

Why this will benefit ecommerce

An increase in de minimis values means less ecommerce orders will be charged duties and taxes, and will positively impact conversion for orders imported into Canada and Mexico.

Learn more

Click here to read the USMCA deal’s fact sheet in detail.

*The USMCA is currently in the final stages of being ratified by Canada’s House of Commons and may become effective as early as 90 days after ratification. We expect this deal to go into effect as early as Spring 2020.