Donald Trump’s steel tariff could result in higher auto insurance premiums in Canada
Published: November 6, 2018
CATEGORY: Car Insurance
Motorists in Canada, and indeed the rest of the world, could see auto insurance premiums rise as a result of Donald Trump. Yes, the controversial US president can also be blamed for your steep car insurance. That’s because The Donald has placed huge tariffs on steel, aluminium, and $250 billion worth of Chinese goods.
According to a report in Politico, the tariffs are likely to cause a problem for insurance companies, who will pass the costs onto consumers.
“We’re thinking this tariff issue is going to emerge as a pretty significant cost issue for us and ultimately to our policyholders,” David Snyder, vice president for international policy at the Property Casualty Insurers Association of America, said.
On March 1, 2018, Trump announced a 25% tariff on steel and a 10% tariff on aluminium imports. After saying “Trade wars are good, and easy to win,” Trump fast tracked the tariffs within 15 days of the announcement. At first, Canada joined the EU, Mexico, Australia, Argentina, Brazil and South Korea in being exempt from the tariffs.
However, the United States confirmed Canada, Mexico, and the EU became subject to the tariffs from May 31, 2018.
Of course, many vehicles are made from parts steel and aluminum. In Canada, this could mean each imported vehicle and parts arriving with 25 percent additional taxes. This outcome does admittedly depend on the results of an investigation into auto parts imports.
If a new tax is imposed, insurance companies could face additional costs of $3.4 billion, which would be passed onto consumers in the form of higher auto insurance premiums. Commercial auto insurance customers will also be socked with higher rates.