WASHINGTON – U.S. President Donald Trump has increased tariffs on Canada to a staggering 35 per cent but a critical carveout is likely to shield most goods from the devastating duties.

The White House has said the tariffs won’t be applied to goods that are compliant with the Canada-U.S.-Mexico Agreement on trade, also known as CUSMA.

Here’s what that means for Canadian companies:

What is CUSMA compliance?

CUSMA was negotiated during the first Trump administration to replace the North American Free Trade Agreement.

Companies can claim preferential treatment under CUSMA if they meet its rules of origin. While it is different depending on the product, generally it requires a specific amount of the goods be made of products or with labour originating from Canada, Mexico or the United Stat

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