Duties, Taxes, and the Carrier's Role in Cross-Border Freight

One of the most common misconceptions among new cross-border carriers: the assumption that duty and tax obligations are someone else's problem and the carrier just drives. That's mostly true — the carrier doesn't pay duties — but the carrier's paperwork accuracy and compliance directly determine whether the importer can clear their goods and whether the shipment clears at all. Here's how the duty and tax system works on cross-border freight and where the carrier fits in.

Who Pays the Duty?

The importer of record pays customs duties and taxes — not the carrier. When a US company imports goods from Canada, that US company (or its customs broker acting on its behalf) files the formal entry with CBP, declares the value and classification of the goods, and pays whatever duties, fees, and taxes apply. The carrier transports the goods; the importer clears them.

Similarly, when a Canadian company imports from the US, the Canadian importer (or their broker) files with CBSA and pays any applicable duties and the GST (Goods and Services Tax) or HST (Harmonized Sales Tax) that may apply. The carrier's job is to deliver the goods to the designated place, not to handle the financial side of customs clearance.

This distinction matters practically: if a load is held because duties are disputed or unpaid, that is the importer's problem to resolve with their broker. The carrier should document the hold time for detention purposes, but is not party to the duty dispute.

CUSMA/USMCA and Tariff Treatment

The Canada–United States–Mexico Agreement (CUSMA in Canada, USMCA in the United States) provides preferential — often zero — duty rates for goods that qualify as originating in Canada, the US, or Mexico. Most manufactured goods and agricultural products moving between Canada and the US under CUSMA qualify for duty-free entry, assuming they meet the rules of origin.

To claim CUSMA/USMCA treatment, the importer must have an origin certification from the exporter or producer. This document is not part of the carrier's package — it's between the exporter and the importer. However, if the certification is missing and the importer cannot claim CUSMA treatment, they may choose to delay clearance until it's obtained, which holds the truck at the border in the interim.

As of 2026, tariffs on some commodity categories have shifted due to trade policy adjustments. Carriers moving steel, aluminum, automotive parts, or agricultural products should be aware that their loads may be subject to additional duties beyond standard MFN rates, and this can affect how importers prioritize and process entries. Higher duty loads sometimes mean more careful scrutiny at entry.

The Carrier Transports, the Broker Clears

The division of responsibilities in cross-border freight is clear:

• Carrier: Files the eManifest (ACE or ACI), provides the PARS/PAPS barcode to the driver, transports the goods from origin to destination, presents documents at the border, and complies with customs officer instructions.
• Customs broker: Files the formal entry (import declaration) with CBP or CBSA, classifies the goods under the correct Harmonized System code, calculates and pays the duties and taxes, and obtains the release authorization that allows the carrier to proceed.
• Importer of record: Pays the duties and taxes, retains the entry records, and bears responsibility for the accuracy of the import declaration.

The broker and the carrier must coordinate precisely. The broker files the entry against the PARS or PAPS barcode; the carrier files the eManifest cargo referencing the same barcode. Both must be filed before the driver arrives at the border. When the CBP or CBSA system matches the entry to the eManifest cargo, and the entry is cleared, the system releases the shipment and the driver gets their "May Proceed" or release confirmation.

Why Correct Paperwork Matters to the Carrier

Even though the carrier doesn't pay duties, the carrier's documents determine whether the entry can be filed accurately. Here's why carriers bear real responsibility for document quality:

• Commodity description on the BOL: The customs broker classifies goods based partly on the BOL description. A vague description ("general merchandise" or "machine parts") forces the broker to make assumptions, which can result in wrong HS codes, wrong duty rates, and an entry that doesn't match the actual goods.
• Weight and quantity: Customs entries declare the quantity and weight of goods. If the BOL says 10 pallets and the trailer has 12, there's a discrepancy that can hold the load.
• Country of origin: The BOL or commercial invoice must correctly state where goods were manufactured, not just where they were shipped from. A Canadian company shipping goods that were manufactured in China is not the same as Canadian-origin goods for CUSMA purposes.
• Carrier liability exposure: While the importer is the party of record for duty purposes, a carrier that consistently presents inaccurate or incomplete paperwork may face CBP scrutiny of the carrier entity itself, higher examination rates, or in extreme cases, penalties for facilitating improper importation.

De Minimis: When Duties Don't Apply

Both Canada and the US have de minimis thresholds — values below which duties and taxes are not collected:

• US de minimis: USD $800 per shipment, per person, per day. Shipments valued at or below $800 can enter the US duty-free under a Section 321 entry. Most commercial freight between carriers and importers exceeds this threshold, but it matters for e-commerce and small parcel flows.
• Canadian de minimis: As of 2026, Canada's de minimis threshold is CAD $40 for duties and CAD $40 for taxes, or CAD $150 for duties with taxes still applicable below that. Canada's de minimis is substantially lower than the US threshold, which means more Canadian imports from the US attract duty and GST/HST even on relatively small shipments.

GST/HST Notes for Carriers

Canadian imports are subject to GST (5%) or HST (depending on the province of delivery) in addition to any customs duties. The GST/HST is typically assessed by CBSA at the time of import entry and paid by the importer through their broker. Carriers do not collect or remit this tax directly on commercial freight.

One practical note: if a carrier is hauling freight for an importer who is GST-registered, the importer can claim an input tax credit on the GST paid at import — so the net cost of GST is often lower than it appears. This is a finance matter for the importer, but understanding it helps carriers explain to clients why cross-border costs are structured the way they are.

Running cross-border? We coordinate PARS/PAPS and eManifest so your loads clear smoothly. Get dispatched with TRUCC — carrier-side dispatch across Canada and the USA.