07:07 AM EDT, 05/13/2025 (MT Newswires) -- Outside of a few core sectors -- for exsmple, autos -- complying with the United States, Mexico, Canada Agreement (USMCA) rules of origin conditions for sectors that previously faced 0% most-favoured nation tariffs when importing to the U.S. seemed unnecessary, said Bank of Montreal (BMO).

However, the March trade data highlights that after the fentanyl tariffs came into effect, both Canadian and Mexican firms quickly ramped up efforts to formally comply with USMCA, noted the bank.

The average tariff rate on Canadian imports increased

to 1.8% in March from 0.1% in January, pointed out BMO.

While that represents a relatively stark increase from virtually free trade between the two countries, it suggests that many

firms worked quickly to meet USMCA conditions, given that

as of 2024, only 38% of Canadian exports to the U.S. came

in under that agreement, stated BMO.

Mexico wasn't far behind with the average tariff rate rising

to 3.8% in March versus 0.3% in January. In 2024, just

over 50% of the value of goods exported from Mexico to

the U.S. came in under USMCA.

Effective tariffs on China will be volatile when the April

data are released but things could settle down not too far

beyond the 26.3% rate in March over the next 90 days -- the

10% universal tariff wasn't in effect yet, added the bank.