US President Donald Trump's last-minute decision to pause a new round of 50% tariffs on Canadian goods has offered businesses a temporary reprieve. For commercial insurance agents, however, the real work is in the year of supply-chain adaptation that preceded it, and the exposures that adaptation has created for clients.
The tariffs, covering roughly $20 billion of Canadian imports, were due to take effect on August 19 before Trump delayed them for three days, saying the US and Canada were finalizing a trade deal. Canadian Prime Minister Mark Carney said substantial progress had been made but that important work remained.
According to Kristina Talkowski (pictured on the left), Nationwide's mid-market commercial lines leader, said the changing environment has made detailed scrutiny of clients’ suppliers and business continuity plans as important as tracking what tariffs do to material costs.
"It's really become about expecting uncertainty and taking a deeper look at material supplies and supply chains," she said. "Relying heavily on one country can be far more disruptive if tariffs change than having a diversified supply chain."
The questions vary by sector. Contractors, for instance, may need to assess where building materials now originate, while manufacturers must understand whether alternative suppliers can provide essential components quickly enough to maintain production. Changing suppliers can also alter the time required to recover from a loss.
"One thing businesses need to consider is whether supply-chain shifts have changed material lead times," Talkowski said. "That could significantly extend the business income period of restoration after a loss."
Business leaders may therefore need to reconsider how long they could realistically remain out of operation following a significant event, and whether existing business income limits remain adequate. Nationwide senior economist Ben Ayers (pictured on the right) said continued reassessment is critical, even while many clients have adjusted their strategies.
"We've been saying for a while we think we're past the peak uncertainty around tariffs," Ayers told Insurance Business. "Obviously, we're not done with the uncertainty, but I think by and large, many businesses have adjusted. They've changed where they get their supplies. They've adjusted their supply chains to try to mitigate against tariffs on the expectation that this is a policy that's going to remain in place at least for the next couple of years."
The US Chamber of Commerce warned before the Canadian tariff deadline that higher duties could further disrupt critical supply chains and put at risk the 13 million American jobs it said depend on trade under the US-Mexico-Canada Agreement.
That same adaptation has also changed inventory strategies in ways that compound concerns around business continuity. Ayers noted inventories have become "pretty tight in many industries," creating potential problems if demand suddenly accelerates or disruption affects newly established suppliers.
"If you do see demand pick up, you might not have all the product available for your end client," Ayers said. "So, there might be some delays in some of that processing. You might lose some reliability if you're not able to provide what you're trying to sell."
Businesses have also generally absorbed much of the additional cost from tariffs and higher energy prices rather than passing it entirely to customers, according to Ayers. That compresses margins and leaves companies with less financial flexibility if another disruption occurs. This directly affects how much risk a client can afford to retain.
Talkowski said the persistent uncertainty creates a chance for brokers and agents to revisit not only coverage but clients' broader risk-financing strategies, including deductibles, alternative risk financing and loss-prevention measures.
"Help them identify those changing exposures," Talkowski said. "While the costs are increasing and there's cost uncertainty, helping clients see how they can control their costs in insurance through risk management and through risk financing techniques can be a really valuable add for agents."
