ON GETTING THE FACTS STRAIGHT:

Labsurface is aware that fellow businesses in the resinous coatings industry consider that:

• Some Canadian companies are claiming USMCA eligibility while they should not because they are simply repackaging finished goods from Asia or elsewhere with their branding; and
• The manufacturing process of some Canadian companies does not qualify for USMCA eligibility, notably because they do not meet the substantial transformation criterion.

Labsurface confirms to all its existing business partners that it DOES NOT partake in the process of repackaging finished good activities and DOES qualify under USMCA at zero tariff as a manufacturer who meets the substantial transformation criterion.

Labsurface proudly employs 50 people who plan, batch, can, package and ship finished good products to more than 40 trusted distributors throughout North America.  We source over 200 raw materials on a regular basis from more than 50 different suppliers, the vast majority of which are established in North America.

Labsurface owns all intellectual property of Labsurface products we manufacture, most of which were developed with differentiated features resulting from 10+ years of research and development work dedicated to bridge the gap between installer needs and what countless hours of trial and error can provide. Labsurface employs a dedicated team of seven R&D professionals including long-tenured chemists to develop these industry unique features which have been at the center of our DNA. Labsurface also employs a quality assurance and control team that ensures notably the precision of our different blends to give our customers peace of mind with respect to the consistency of the products they get.

Independent verification by U.S. customs and border protection

Proactively, Labsurface hosted a team of representatives from the U.S. Customs and Border Protection agency in June 2025. That team has reviewed Labsurface’s purchasing and manufacturing practices in detail and has concluded unequivocally that Labsurface is compliant with the USMCA policy set forth by US Customs and CBP with zero tariff. Labsurface opened its plant and books to CBP and went through the step-by-step manufacturing process to arrive to this conclusion.

Finally, there appears to be confusion around Executive Order 14346 published on September 5, 2025 with an application date of September 8, 2025. According to some industry voices, by removing from Annex II flooring resins, this Executive Order would remove the exemption from duties per USMCA. Such a statement is erroneous as the removal only affects countries that are outside USMCA.

Some of these topics are highly technical and confusing in nature and as always, our customer service and sales representatives remain at your disposal for any further clarification you may require.

APPENDIX

Technical details supporting Labsurface’s legitimacy as a tariff-exempt supplier of resinous coating products

As a transparent organization who truly walks the talk when it comes to servicing its customer base with predictability, since the beginning of 2025, Labsurface has undertaken the following steps to confirm the compliance of its exports to the United States under USMCA:

• Confirmation of its exempt status by opening its books to two different custom brokers;
• Seeking legal advice from a United States based law firm to confirm that its business practices are in compliance with USMCA;
• Proactively inviting the U.S. Customs and Border Protection agency in order to obtain a written confirmation of the compliance of its business practices under USMCA. On July 1, 2025, a notice of action addressed to Labsurface by the Department of Homeland Security confirms that CBP has verified the origin of Plastic Resin pursuant to 19 CFR 182.72 and that the goods were imported into the U.S. on entry summary WFN-90989985 for which a claim for USMCA preferential tariff treatment was made. The verification further concludes that the good qualifies as an originating good pursuant to General Note 11 to the harmonized Tariff Schedule of the U.S. The plastic resin is classified under HTS 3907.30.0000 with a duty rate of “free” (with 2024 USMCA certificate);
• Hiring a Big 4 advisor to exhaustively study Labsurface’s purchases and manufacturing practices in order to confirm that substantially all of its products were transformed within Labsurface’s premises and therefore considered as goods manufactured in North America and;
• Communicating proactively with its customers with all relevant developments.

In conclusion, even though insiders to the resinous coatings industry may pretend that Executive Order 14346 published on September 5, 2025 with an application date of September 8, 2025 may invalidate HTS 3907.30 by removing it from Annex II, this simply is inaccurate with respect to Labsurface and USMCA compliant entities. Labsurface’s epoxy resins qualify as originating under the USMCA and are thus exempt from IEEPA fentanyl and Reciprocal tariffs imposed on products of Canada when imported into the United States. Executive Order 14346 does not operate to impose any additional duties on Labsurface’s USMCA eligible epoxy resins.

Executive Order 14257, dated April 2, 2025, section 3(d) and (e) exempts products of Canada eligible for USMCA duty free treatment from:

• The International Emergency Economic Powers Act (IEEPA) fentanyl tarrif of 25%, as amended;
• The 10% reciprocal tariff imposed by Executive Order 14326 of July 31, 2025, section (d), and
• The contingent IEEPA reciprocal tariff of 12% imposed by Executive Order 14257, section 3(e), in the event of termination of the fentanyl tariffs on products of Canada eligible for USMCA treatment.

In addition, Executive order 14257 granted a separate and independent exemption from Reciprocal tarriffs for products of any country imported under tariff provisions listed on Annex II to that Order. Annex II included epoxy resins, in primary forms, imported under subheading 3907.30.00. However, because Labsurface is relying on the USMCA eligible product exemption from IEEPA Fentanyl and Reciprocal tariffs on products of Canada, and is not relying on the Annex II exemption, the removal of subheading 3907.30.00 from Annex II has no practical effect on Labsurface.