The US will remove its 50% tariffs from some Canadian goods on October 30, while adding others to the list. That means businesses, and the brokers and insurers covering them, face yet another change to the assumptions behind their insurance programs.
A White House proclamation signed on October 23 exempts certain plywood sheets, paper and paperboard products, machinery, refrigeration equipment, packing crates, boxes and other packaging, and fresh and dried seaweed from the 50% duties. At the same time, it adds products including certain valves, carpets and waste products. The White House described the move as refining the scope of the tariffs, which are imposed under Section 338 of the Tariff Act of 1930.
The US imposed 50% tariffs on about US$20 billion of Canadian goods in August after trade talks broke down. Canada responded in September with counter-tariffs of 15% to 50% on a similar value of US imports.
The changes come less than two weeks before the November 3 US midterm elections. Republican Senator Susan Collins of Maine, who faces a close race, said she had lobbied for the exemptions to help her state’s farmers and food producers. Dominic LeBlanc, Canada’s minister responsible for Canada-US trade, said Ottawa was assessing the changes and remained ready to work toward a more mutually beneficial trading relationship.
For insurers and brokers, the main issue is that the value of insured goods and income keeps shifting. When a 50% duty applies, the cost of replacing imported inventory, equipment or components can rise sharply. When it’s removed, those values fall again. Policies written on last year’s figures may overstate or understate what a business would need after a loss.
Lockton Canada warned in its recent market update that tariffs are making insured values out of date, and urged businesses to review property values, business interruption calculations, cargo limits and project insurance whenever their business changes materially, not just at renewal. This week’s changes are a good example. Exporters of plywood, paper or packaging may now see US demand and margins recover, while producers of the newly added goods face the reverse.
Business interruption is likely to be most affected. BI cover is usually based on projected revenue and margins, and tariff swings can quickly make those projections inaccurate, leading to under- or over-insurance. Trade credit cover may also come under pressure, since US customers and Canadian suppliers hit by tariffs may be under more financial strain than their latest statements show.
Canada’s counter-tariffs also matter for claims. Tariffs on US goods can raise the cost of parts and materials used to repair homes, vehicles and commercial property in Canada, which feeds into claims severity.
The latest changes point toward more frequent check-ins for trade-exposed clients rather than annual reviews alone. Brokers with clients in forestry, paper, packaging, machinery and food processing should check whether their insured values and BI worksheets reflect the tariff changes. Clients newly added to the tariff list, including carpet and valve makers, may need the opposite review. Given how often tariffs have changed this year, mid-term endorsements to adjust values may become routine.
