Skids of vehicle components are awaiting inspection by U.S. Customs and Border Protection in a warehouse near North America’s busiest border crossing. These shipments are coming into the United States from Canada within the numerous trucks traversing the Ambassador Bridge in Windsor, Ontario daily.
Examining a steel rod he extracted from a cardboard box, import specialist Marc Ballelli suspects an issue. “They will classify this as an auto part but this is a steel tube,” expressed Ballelli. The distinction between it being a steel product or an auto part is significant, given the 50 percent tariff on steel, while Canadian-made auto parts are tariff-exempt.
Ballelli is commencing an investigative process that might lead to a financial penalty in addition to the appropriate tariff, posing a potentially costly surprise to the company’s finances. Canadian firms grappling with tariffs highlight that the paperwork confronting import specialists on both sides of the border was once a routine task but has now escalated to a top priority handled by senior staff.
Kaycee Vasudeva, owner of automotive parts manufacturer Ultra-Form Manufacturing, attributes the economic slowdown due to tariffs to losing a client. This circumstance compelled him to lay off twelve workers while creating two new roles within his company solely to manage the paperwork. Vasudeva emphasized, “If I’m directly shipping to the USA, which we frequently do, it becomes a headache.”
The new responsibilities are additional expenses necessary “to ensure we accurately align every line on the custom papers with the requirements.” Vasudeva underscored the challenges and stress accompanying efforts to determine the correct classification of products crossing the border, a new hurdle for his long-established auto parts business.
Between inspecting skids of automotive parts, Ballelli and his team field calls from individuals striving to comply with regulations. Staudt, assistant director of CBP’s Automotive & Aerospace Centre of Excellence and Expertise, acknowledged the rise in additional tariffs, attributing some errors to genuine mistakes while acknowledging instances of outright fraud.
Trade data from the U.S. CBP reveals a steady issuance of trade penalties but a substantial increase in recovered funds, from $667.55 million in fiscal 2024 to $32.95 billion in fiscal 2025. Canadian companies exporting to the U.S. have transitioned from the initial tariff shocks to focusing on accurately valuing products to lower tariffs and ensure proper documentation.
Fischer, senior manager of customs and global trade at Doane Grant Thornton, noted increased scrutiny from customs officials on both sides of the border on customs paperwork. He emphasized the necessity of trade experts to interpret complex trade agreements accurately, as these regulations are now subject to heightened examination by customs authorities.
Nott, a partner at KPMG specializing in trade and customs, highlighted the significant shift in the risk associated with cross-border operations for Canada’s automotive industry. She emphasized the need for companies to adapt to the heightened scrutiny and regulatory changes, signaling a prolonged period of adjustment to the evolving trade landscape.
