At one minute past midnight on Tuesday, Canada will impose tariffs on hundreds of American products, ranging from 15% to 50%. It is Ottawa's answer to the 50% Section 338 duties Washington placed on Canadian exports last month - a list Canada has valued at roughly $27.6 billion and matched dollar for dollar. Steel and aluminum tariffs already in place jump from 25% to 50%. Appliances, furniture, clothing, pulp and paper, and a long list of other goods are on the list for the first time.
Prime Minister Mark Carney has framed the move as reluctant but necessary. Referring to the Canada-United States-Mexico Agreement, he told reporters that Canada learned the hard way that even signed deals can be treated loosely: "we recognised that sometimes its signature was written in pencil." Brian Clow, who advised the previous government on Canada-US relations, put the strategy more plainly - Canada is not imposing these tariffs because it wants a trade war, it is imposing them because it wants the trade war to end.
Washington does not sound ready to end anything. US Commerce Secretary Howard Lutnick has accused Ottawa of picking a fight for domestic political reasons even if it is bad for the economy of Canada. Treasury Secretary Scott Bessent likened Canada to a little yippy dog barking at a bigger one. As of the weekend, no new meetings were scheduled between the two sides.
This publication asked the market where it saw the biggest insurance risk from the trade collapse last week. A reader survey found 33% expect minimal impact on the insurance industry, 25% expect rising claims costs, another 25% expect slower trade-line growth, and 17% expect more demand for trade cover.
Mariano Neiman, chief operating officer at Zensurance, has seen similar pressure building from the small-business side, though he is cautious about pinning it on tariffs alone. Fewer than 10% of the small business owners his firm surveyed named tariffs as their top concern. But 71% reported higher operating costs than a year ago, and nearly half said they have considered closing this year. In Neiman's words, it is the rising costs paired with decreasing revenues creating this pressure coming from both ends.
Canadian exporters have historically insured less than 1% of their foreign receivables, even though international sales make up roughly 40% of export-focused businesses' revenue, according to the Receivables Insurance Association of Canada. Trade with the US takes in more than 75% of Canadian exports, and for decades that trade was priced by exporters as close to risk-free.
Export Development Canada, the country's largest trade credit insurer, has deployed a multi-billion-dollar support program for tariff-hit businesses. Allianz Trade in Canada says inquiries are up roughly 10% over the past year. David Dienesch, the company's Canadian CEO, told this publication in mid-August that he expects the uncertainty to last: "we're heading for a lot of years of uncertainty ahead of us."
Uptake still lags the exposure. Only about 5% of Canadian exporters, or roughly 7,000 to 10,000 businesses, currently carry the coverage. Brokers with clients in the newly targeted sectors have a short window to raise it before the next round of tariffs becomes the thing everyone is scrambling to respond to.
Doubling the steel and aluminum counter-tariff to 50% lands directly on an industry that is core to commercial property and casualty books. It also compounds a problem already building in personal lines: auto parts and repair inputs have been running through elevated tariffs for months, and Washington has separately flagged a further increase, to 50% on autos and auto parts from January 1, 2027, though that has not been formally implemented yet. Repair-cost inflation in auto physical damage claims does not need another layer of tariff-driven input cost on top of it.
The sectors carrying the heaviest new load - steel, dairy, appliances, agricultural equipment, pulp and paper - are also concentrated in Ontario and Quebec manufacturing corridors. Those are the regions most likely to feel it first in commercial exposure, workers' compensation experience and business interruption claims if this drags on.
The dispute is landing on an economy that was only just finding its footing. Statistics Canada's most recent Labour Force Survey put the national unemployment rate at 6.4% in August, unchanged from July, after roughly 42,000 jobs disappeared in the month - even as the economy posted strong quarterly growth in the second quarter, the best performance since early in 2023 according to Statistics Canada's published GDP data. A Nanos Research poll for Bloomberg News, taken in the days before this week's tariffs, put approval of Carney's handling of the trade file at close to three-quarters good or very good.
Economists at Oxford Economics estimate the combined effect of the US tariffs, Canada's retaliation and related federal support programs will shave approximately 0.3% off Canadian output against their August baseline forecasts for 2027. That estimate only covers what has already been announced.
Businesses with US-bound receivables in the newly affected sectors are the clearest candidates for a trade credit conversation right now - and it is worth revisiting how existing contracts allocate tariff-cost risk, not just payment-default risk, while you are at it. Manufacturers and importers exposed to steel, aluminum or auto parts should expect input-cost pressure to keep showing up in claims and valuations. For SME clients who do not see themselves as trade-exposed at all, cash flow may be the more useful conversation, given how many are already telling researchers they have considered shutting down this year for reasons that have nothing to do with tariffs.
