Tariffs, duties, and customs regulations have a major impact on the cost of specialty base oils and lubricants—both at the supplier level and in your final delivered price. Understanding how international trade policies, especially under the United States-Mexico-Canada Agreement (USMCA), affect these costs is critical for lubricant manufacturers, distributors, and industrial buyers.
Recently, the U.S. administration has increased duties on select Canadian energy imports that do not meet USMCA compliance, further raising operating costs for lubricant producers across North America.
Here’s what you need to know—and how partnering with a knowledgeable, USMCA-compliant base oil supplier like Signal Fluid Solutions can help protect your margins.
New Tariffs on Canadian Energy Imports: What Changed?
In March 2025, the Independent Lubricant Manufacturers Association (ILMA) shared new guidance from U.S. Customs and Border Protection (CBP) related to Canadian petroleum imports.
While certain refined petroleum products now qualify for a reduced 10% duty under USMCA, many raw materials, such as petroleum-based lubricating oils (classified under Heading 27 of the Harmonized Tariff Schedule of the United States), remain subject to a 25% tariff if they fail to meet USMCA’s strict rules of origin.
Examples of Energy Resources Potentially Facing Extra Duties:
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Hydrocarbon mixtures (less than 50% of any single hydrocarbon), including insulating or transformer oils
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Renewable fuel blends (51% or more biofuel content)
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Other hydrocarbon-based mixtures
If a product doesn’t qualify under USMCA rules, it could trigger high tariffs—putting your bottom line at risk.
Why USMCA Compliance Matters in Base Oil Sourcing
Partnering with a USMCA-compliant supplier is the smartest way to avoid unnecessary costs. Signal Fluid Solutions is committed to helping our clients stay tariff-exempt and compliant through strategic sourcing and deep regulatory knowledge.
We ensure:
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Accurate Origin Documentation: Helping you access reduced-duty or zero-duty rates
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Smart Canadian Sourcing: Not all Canadian-origin products qualify; we vet our supply chain carefully
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U.S.-Based Sourcing Prioritization: Whenever possible, we source domestically to eliminate duties entirely
By working with Signal Fluid Solutions, you’re gaining more than just a supplier—you’re gaining a strategic ally in navigating today’s volatile trade environment.
Global Customs and Duties: What International Buyers Should Know
Whether you’re based in North America, South America, the Caribbean, or Europe, local duties, VAT, and documentation requirements also influence your final base oil cost. Here’s a region-by-region overview:
1. Canada & Mexico (North America)
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USMCA allows reduced or eliminated duties for qualifying products.
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Internal taxes like GST/HST (Canada) or IVA (Mexico) apply.
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Proper documentation, especially certificates of origin, is essential.
2. South America
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Free Trade Agreements (FTAs) with countries like Chile and Colombia can lower duties.
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Mercosur nations (e.g., Brazil, Argentina) impose a Common External Tariff (CET).
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Taxes such as IVA must be factored into landed cost.
3. The Caribbean
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CARICOM & CBI programs may offer duty reductions.
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Countries may apply CETs; U.S. preference programs (CBERA/CBI) can help.
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Work with a local customs broker for country-specific rules.
4. Europe
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EU applies the Common Customs Tariff (CCT) and VAT, with rates ranging from 17–27%.
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UK has separate post-Brexit rules under the UK Global Tariff (UKGT).
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Other non-EU nations like Switzerland and Norway follow unique tariff schedules.
Pro tip: Always verify HS Code classifications and tariff rules for accurate landed cost forecasting.
Why Choose Signal Fluid Solutions as Your Base Oil Partner
At Signal Fluid Solutions, we go far beyond product supply. We serve as your expert guide through international trade complexity.
✅ Tariff Avoidance & USMCA Compliance
We prioritize U.S.-sourced, duty-free base oils and specialty products—helping you dodge the 25% tariff on noncompliant imports. Our strict USMCA compliance practices reduce risk and stabilize pricing.
✅ Strategic Global Supply Chain
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Rapid Fulfillment: Our terminal storage and inventory control ensure fast, efficient delivery.
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Supplier Redundancy: Long-term relationships with major producers provide secure product availability, even during global disruptions.
✅ Expert Logistics Support
Our team stays current on customs laws, documentation needs, Harmonized System Codes, and international tax obligations. We help clients across the globe:
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Navigate local import taxes and duties
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Understand trade agreement eligibility
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Forecast total landed costs with accuracy
Work with Signal Fluid Solutions—Your Trusted Base Oil Supplier
Whether you’re a U.S.-based lubricant manufacturer looking to minimize import duties, or an international buyer navigating local customs regulations, Signal Fluid Solutions offers the knowledge, supply chain strength, and regulatory expertise you need.
Contact Signal Fluid Solutions for expert guidance on tariffs, duties, and smart global sourcing strategies that protect your margins and keep your business running efficiently.
