As U.S. President Donald Trump’s steel and aluminum tariffs begin, Canadian businesses are trying to prepare as best they can.
“We’ll definitely notice the increase … our parts prices will go up,” said Kevin Fujita, a co-owner at CSN Kustom in Coaldale.
He says his southern Alberta business will be impacted and unfortunately customers will have to absorb any increases.
“In our industry, we’re lucky enough to have insurance work where most of that cost, unfortunately, gets passed onto the consumer and the insurance company which will ultimately end up coming out of the customer’s pocket.”
This was echoed by Aaron Sutherland, vice-president at the Insurance Bureau of Canada, indicating the 25 per cent steel and aluminum tariffs declared by Trump on Monday could have a widespread effect.
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“That steel, that aluminum, it’s what’s going into the auto parts and vehicles that the U.S. manufactures and we ship back to this country. Of course, as the price of those increases, that will be reflected in the cost of auto insurance claims and that’s the biggest piece in your auto insurance premium,” said Sutherland.
“So, any kind of trade war, even something that only applies to steel and aluminum, is extremely concerning.”
Alberta does have certain consumer protections in place regarding insurance, but Sutherland says there will still be impacts on the everyday driver.
“Here in Alberta, the government has imposed an auto insurance rate cap. That prevents insurers from reflecting the increased price of things like changes in the price of vehicle parts, materials, things of that nature.
“That shields consumers from some of the direct impacts here, but what it does is force auto insurers to scale back their offerings because if they can’t accurately price for it, they’re not able to sell it.”
The uncertainty of it means businesses need to be prepared.
“We have to deal with it car by car, person by person and like I said, not to repeat myself, but we’re just lucky in the industry we’re in that we have the insurance network to take care of it that way so we can just go on with our day to days and just roll with the punches, so to speak,” said Fujita.
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Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.