Carpets made in the USA – whether commercial floor coverings (e.g. carpet tiles for offices) or residential broadloom – enter Canada duty-free under the Canada–U.S.–Mexico Agreement (CUSMA/USMCA) if they meet the agreement’s rules of origin. All major carpet categories (carpet tiles, broadloom, etc.) qualify for a 0% import tariff into Canada as USMCA-origin goods trade.gov. Below we detail the HS codes and duty rates, the USMCA rules of origin for carpets, and recent tariff developments affecting U.S. carpets.
Duty-Free Access: U.S.-origin carpets (both commercial and residential) are tariff-exempt when imported into Canada under CUSMA. In other words, no customs duties apply so long as the carpets qualify as “originating” under USMCA trade.gov. Canada’s tariff schedule for USMCA shows a 0% rate for all carpet classifications from the U.S. or Mexico. For example, tufted carpets (HS 5703) and felt carpet tiles (HS 5704) all have a “0” duty rate for US and MX origin in Canadainternational.gc.ca. This duty-free treatment covers both commercial carpet tiles and broadloom carpet made in the USA.
HS Codes and Duty Rates: Carpets fall under HS Chapter 57 (textile floor coverings). Key subcategories include tufted carpets (HS 5703), woven carpets (5702), felt/nonwoven carpets (5704), and others (5705). Canada’s Most-Favored-Nation (MFN) tariff on these products ranges roughly from 6.5% up to 14% (depending on material and construction) for countries without a trade agreement cbsa-asfc.gc.cacbsa-asfc.gc.ca. Under CUSMA, however, the United States Tariff (UST) rate is Free (0%) for all these HS codescbsa-asfc.gc.ca. The table below shows representative HS codes for carpets and their Canadian tariff rates:
| HS Code | Description | Canada MFN Tariff | CUSMA Tariff (UST) |
|---|---|---|---|
| 5703.10 | Tufted carpets of wool or fine animal hair (broadloom rugs) | 10–13% (MFN)cbsa-asfc.gc.ca | 0% (Free)cbsa-asfc.gc.ca |
| 5703.21 / 5703.29 | Tufted carpets of nylon or polyamide (incl. commercial carpet tiles and broadloom) | 10–12.5% (MFN)cbsa-asfc.gc.ca | 0%cbsa-asfc.gc.ca |
| 5703.31 / 5703.39 | Tufted carpets of other man-made fibers (e.g. polypropylene, polyester) | 10–12.5% (MFN)cbsa-asfc.gc.cacbsa-asfc.gc.ca | 0%cbsa-asfc.gc.cacbsa-asfc.gc.ca |
| 5704.10 / 5704.20 | Felt carpet tiles (needle-punched, not tufted, by size ≤1 m²) | 12.5% (MFN)cbsa-asfc.gc.ca | 0%cbsa-asfc.gc.ca |
| 5705.00 | Other carpets and floor coverings (n.e.s.) | 12% (MFN)cbsa-asfc.gc.ca | 0%cbsa-asfc.gc.ca |
Source: Canada Customs Tariff (2025) cbsa-asfc.gc.cacbsa-asfc.gc.ca. All US-origin goods under these HS codes enter Canada duty-free via CUSMA, whereas MFN rates apply to non-USMCA countries. Note: There is no distinction in tariff treatment between “commercial” vs. “residential” carpets – classification is based on the carpet’s construction/material, not its end-use.
Documentation: To receive the preferential 0% tariff, the Canadian importer must claim USMCA preferential treatment and have a valid certificate of origin on file. Originating goods are not automatically duty-free without this claim tradecommissioner.gc.ca. If a carpet does not satisfy USMCA’s rules of origin (or if no origin claim is made), it is treated as non-originating and the regular MFN duty (e.g. 6.5–14%) would apply.
“Yarn-Forward” Requirement: USMCA (CUSMA) applies the standard textile/apparel rule of origin to carpets, known as “yarn-forward.” This means that, with few exceptions, the yarn used to manufacture the carpet must be made in North America for the finished carpet to qualify shenglufashion.comtrade.gov. Fibers (raw materials) may be from any country, but once those fibers are spun or extruded into yarn, that process must occur within a USMCA country. For example, a U.S. carpet tufted from Asian-made yarn would not qualify; the yarn itself should be produced in the U.S., Canada, or Mexico for the carpet to be originating.
Tariff Shift Rule: Specifically, under the product-specific rules, a carpet of Chapter 57 must be made from inputs of a different HS chapter – excluding foreign yarns classified in Chapters 51–55 (the chapters for wool, cotton, vegetable, and man-made yarns) international.gc.cainternational.gc.ca. In practical terms, this restricts the use of non-North American yarn. USMCA did increase the de minimis allowance for textiles: up to 10% of the carpet’s weight can consist of non-originating fibers/yarns without disqualifying the product (an increase from NAFTA’s 7% tolerance) trade.govustr.gov. Elastomeric (stretch) yarns have a 7% weight limit within that de minimis ustr.gov. This flexibility allows small amounts of foreign yarn (or backing fiber) in the carpet while still remaining origin-qualified.
Examples: A broadloom carpet tufted in Georgia from U.S.-made nylon yarn will satisfy the rule. Conversely, a carpet tufted in the USA from imported Chinese polypropylene yarn would fail the rule of origin (since the main yarn is non-originating and over 10% of the product). In the latter case, the carpet would not be “USMCA originating” and would incur the MFN duty on import to Canada. Companies must thus source yarn (and in woven carpets, even the weaving) from within North America to take advantage of the duty-free status.
Special Cases: All U.S.-manufactured carpets destined for Canada generally fall under the yarn-forward rule. (Notably, the USMCA introduced an even stricter **“fiber-forward” rule for certain tufted carpets (HS 5703.20–5703.30) traded between the U.S. and Mexico trade.gov. This requires even the fiber to originate in North America for those particular sub-categories. However, for U.S.–Canada trade, standard yarn-forward applies in virtually all cases.) In summary, as long as the carpet’s yarn is North American and the carpet is tufted or woven in the USMCA region, it will qualify for the 0% tariff preference.
Canada’s 2025 Counter-Tariffs: Although USMCA guarantees zero tariffs on originating goods, recently a trade dispute has temporarily altered the landscape. In March 2025, Canada imposed a 25% surtax on a broad list of U.S.-origin goods – including carpets and other textile floor coverings – in retaliation for U.S. tariffs on Canadian products canada.cacanada.ca. Effective March 4, 2025, all carpets of U.S. origin (HS 5701 through 5705) entering Canada became subject to an additional 25% import duty, despite qualifying under CUSMA. This measure is a countermeasure outside of USMCA’s normal terms. According to Canada’s Department of Finance, the 25% surtax will remain in effect “until the U.S. eliminates its tariffs against Canadian goods.”canada.ca In the published list of targeted items, every major carpet tariff line (HS 5701.10, 5701.90, 5702.xx, 5703.xx, 5704.xx, 5705.00) is explicitly includedcanada.cacanada.ca, meaning both commercial and residential carpets from the U.S. now incur this 25% duty in Canada.
Impact: For importers, this counter-tariff effectively overrides the USMCA preference – U.S. carpets are normally duty-free, but are currently facing 25% customs duty at the border due to the ongoing dispute. For example, a U.S.-made office carpet tile that would usually enter Canada at 0% now faces a 25% tariff. This surcharge is on top of any regular sales taxes, and significantly raises the cost for Canadian buyers. Businesses importing U.S. carpets should be aware of this temporary tariff and factor it into cost calculations. (It may be possible to seek duty drawback or remission if the situation changes, but for now the 25% applies at import.)
Resolution and Risk: This Canada–U.S. tariff exchange is a recent development (as of early 2025). Should the U.S. remove its tariffs on Canadian goods (the precipitating issue), Canada has stated it will lift the 25% counter-tariffs canada.ca. Importers should monitor news from the Government of Canada (Dept. of Finance and CBSA) for updates on when these counter-tariffs might end. Trade analysts consider these tariffs a risk factor for 2025–2026; while they are not permanent, they reflect how political/trade disputes can suddenly affect duty costs even for USMCA-qualified goods. Apart from this dispute, no other new tariffs specifically targeting carpets are proposed – under normal conditions, U.S. carpets will remain duty-free in Canada per USMCA. However, companies should keep an eye on the 2026 USMCA “sunset” review. In 2026, the parties will review the agreement; although it’s not expected that tariffs on items like carpet would be reintroduced, a breakdown or major renegotiation of USMCA in the future could pose a risk of tariffs returning. At present, the North American free trade framework is intact and highly beneficial for carpet trade.
Other Trade Measures: It’s worth noting that anti-dumping or safeguard duties have not been applied by Canada on U.S.-made carpets. The U.S. and Canada traditionally do not use AD/CV duties against each other’s textile floor coverings, so there are no such extra duties on U.S. carpets (unlike some products from overseas suppliers). The primary tariff risk for U.S. carpets in Canada remains compliance risk (losing duty-free status if rules of origin aren’t met) and the aforementioned political tariffs (e.g. the current 25% countermeasure). Ensuring proper origin documentation and sourcing will mitigate the former, while the latter will depend on bilateral trade negotiations.
In summary, commercial carpet tiles and broadloom carpets manufactured in the USA are normally imported into Canada duty-free under CUSMA/USMCA, provided they meet the North American origin rules trade.gov. Key HS classifications for carpets (5701–5705) all carry a 0% preferential rate for U.S. origin goods. Importers must adhere to the rules of origin (yarn-forward) to claim this preference, as Canada maintains MFN tariffs (up to ~10–14%) on non-originating carpetscbsa-asfc.gc.ca. Currently, an extra 25% tariff is being applied to U.S. carpets by Canada as a temporary countermeasurecanada.ca, a situation to monitor closely. Barring such exceptional measures, U.S.-made carpets enjoy tariff-exempt status in Canada under USMCA, which has facilitated cost-effective cross-border trade in both commercial flooring and residential carpets.
Sources:
Canada Border Services Agency – Canadian Customs Tariff 2025, Chapter 57 (Carpets) cbsa-asfc.gc.cacbsa-asfc.gc.ca (HS codes, MFN vs. preferential rates)
Global Affairs Canada – CUSMA Tariff Schedule (Canada)international.gc.ca (All carpet HS lines show “0” tariff for US/MX origin)
U.S. Dept. of Commerce – Summary of USMCA Textile Provisions trade.govtrade.gov (duty-free entry criteria, yarn-forward rule, de minimis increase)
USTR/USMCA Text – Product-Specific Rules of Origin, Chapter 57international.gc.caustr.gov (textile origin rules for carpets)
Department of Finance Canada – News Release March 4, 2025 canada.cacanada.ca (25% retaliatory tariffs on $30B of U.S. goods, including carpets)
CBSA Customs Notice (2025) – List of Goods Subject to Countermeasures canada.cacanada.ca (HS 5701–5705 listed for 25% surtax)
Trade Commissioner Service (Canada) – CUSMA Compliance Guidance tradecommissioner.gc.ca (importance of origin certification for duty-free claims)