Free trade agreements that cut U.S. duty to zero: USMCA, KORUS and others

A cotton T-shirt pays 16.5% duty from Vietnam. The same shirt from South Korea, Peru or Honduras can enter free, if it qualifies. For many sellers, a trade agreement is the largest duty saving available, and it is also the one most often claimed wrong. This guide covers which agreements exist, how to read them in the HTS, how to claim them, and what changed in 2026.

The 20 countries with a U.S. free trade agreement

There are also preference programs that are not trade agreements: GSP (code A), AGOA for sub-Saharan Africa (D), the Caribbean Basin programs (E and R) and Nepal (NP). Their status in 2026 is covered below.

How to read the special rate column

Every 8-digit HTS line has three rate columns. Column 1 General is the normal rate. Column 1 Special lists lower rates and the program codes that qualify for them. Column 2 is for the few countries without normal trade relations. Here are two real lines:

An asterisk, as in A*, means some beneficiary countries are excluded for that line. A plus sign, as in S+ or P+, marks specific rules, such as goods that qualify under a special provision. The program code only tells you a lower rate exists. Your goods still have to meet that agreement's rules of origin.

Rules of origin: made there is not enough

Shipping from Korea does not make a product Korean for KORUS purposes. Each agreement has rules of origin, and goods qualify in one of three ways:

• Wholly obtained or produced in the territory, such as fruit grown in Mexico.
• Produced only from originating materials, such as a Canadian table made of Canadian and U.S. wood.
• Meeting the product-specific rule, usually a change in tariff classification for the foreign inputs, a regional value content minimum, or both.

Under USMCA, where a product rule needs regional value content, the threshold is generally at least 60% under the transaction value method or 50% under the net cost method. A de minimis rule lets non-originating materials worth up to 10% of the good's value fail the tariff shift without disqualifying it. For textiles and apparel the de minimis is 10% by weight instead.

How to claim USMCA

1. Confirm the rule. Find your product's rule in General Note 11 of the HTSUS and check that your bill of materials meets it.
2. Get a certification of origin. The importer, exporter or producer can complete it. There is no official form. It can go on the invoice, as long as the invoice is not issued in a non-USMCA country. It must include the minimum data set out in 19 CFR 182.12: who is certifying, the certifier, exporter, producer and importer, a description, the HS code to at least 6 digits, the origin criterion, the invoice number or a blanket period of up to 12 months, and a signed statement.
3. Claim on the entry. Your broker puts S or S+ before the HTS number on the entry summary. You must hold the certification when you make the claim.
4. Keep records for 5 years from the date of importation. CBP can ask for them in a verification.
5. Claim after the fact if you missed it. You can file a post-importation claim for a refund within 1 year of importation.

Other agreements work the same way in outline: a program code on the entry, a claim based on the importer's knowledge or a certification, and records kept for 5 years. The paperwork details differ, so check the agreement's part of 19 CFR before your first shipment.

The MPF exemption

Originating goods under most FTAs also skip the Merchandise Processing Fee of 0.3464%. Under 19 CFR 24.23(c), the exemption covers USMCA, Israel, Singapore, Chile, Australia, Bahrain, CAFTA-DR, Oman, Peru, KORUS, Colombia and Panama. Jordan and Morocco are not on the list, and neither is Japan, so those goods still pay MPF. On a large entry that is up to $670.86 per entry from October 1, 2026.

What FTAs no longer cover in 2026

For years, an FTA claim meant your total duty was the special rate, often zero. That stopped being true on July 24, 2026, when USTR's Section 301 forced labor duties took effect on goods from 60 economies.

• Most FTA partners pay 12.5% on top of the FTA rate. That includes Australia, Chile, Singapore, Israel, Peru, Colombia, Bahrain, Oman, Morocco and Costa Rica.
• Some pay 10%, including Canada, Mexico, Jordan, El Salvador, Guatemala and Honduras.
• For the EU, Japan, South Korea, Taiwan and Switzerland, the rate is 10% or 12.5% net of the MFN rate. How the net-of-MFN rule works on a line where you claim a zero KORUS rate is something to confirm in Chapter 99 note 52 or with your broker before you price.
• Exempt: goods of Canada or Mexico entered free of duty under USMCA, and CAFTA-DR textiles and apparel entered duty-free. Goods subject to Section 232 are also excluded.

So an Australian wool sweater that qualifies for AUSFTA pays 0% base duty but 12.5% Section 301. A Mexican coffee table that qualifies for USMCA pays nothing. Before July 24 those two looked the same on a spreadsheet. Now they do not.

Earlier 2026 tariffs treated FTAs differently. The 2025 IEEPA fentanyl duties exempted USMCA goods, and the Section 122 surcharge from February 24 to July 24, 2026 exempted USMCA goods and CAFTA-DR textiles. Both are now gone. IEEPA duties paid in 2025 and early 2026 are being refunded through CBP's CAPE process.

USMCA is under review

At the July 1, 2026 joint review, the U.S. did not agree to renew USMCA in its current form. The agreement stays in force, and the parties now hold annual reviews. If they do not agree to renew, the agreement runs until July 1, 2036. On October 5, 2026 USTR opened public comments and announced a hearing for the 2027 annual review. Nothing changes for claims today, but if you are moving production to Mexico for USMCA benefits, watch the review closely.

GSP and AGOA in 2026

GSP expired on December 31, 2020 and has not been renewed. As of August 2026, CBP still lists it as pending renewal by Congress. Goods from GSP countries pay the general rate. CBP suggests you keep flagging eligible entries with the A code, because past renewals have included refunds back to the expiry date.

AGOA expired on September 30, 2025. On February 3, 2026 it was reauthorized through December 31, 2026, retroactive to the lapse, together with the Haiti HOPE and HELP programs. Trade press reports that a continuing appropriations act signed in September 2026 extended AGOA to December 31, 2028. We could not confirm that law against an official text as of October 22, 2026, so treat the 2028 date as likely but unconfirmed.

The Agreements on Reciprocal Trade signed in 2025 and 2026 with countries such as Argentina, Ecuador, El Salvador, Guatemala, Malaysia and Cambodia are not free trade agreements. They add no program code to the HTS and do not change column 1 special rates.

A quick decision checklist

1. Is the country of origin an FTA partner? Origin is where the good was made or last substantially transformed, not where it shipped from.
2. Does the HTS line show that program code in the special column?
3. Does the product meet the rule of origin? Get the supplier's bill of materials and, for apparel, the origin of yarn and fabric.
4. Do you have a certification or the documents the agreement requires?
5. What stacks on top? Check Section 301 and Section 232 for that origin in 2026.

HTSBase shows the general rate, every special program on the line and the stacked duties by origin, so you can compare a Korean, Mexican and Vietnamese supplier for the same code.