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Trade talks collapse triggers dated tariff risk for trade credit insurers
Only about 5% of Canadian exporters carry trade credit insurance, and the new tariff timelines could push more companies from inquiries into active coverage.
US-Canada trade negotiations collapsed Friday night, and 50% tariffs on about $20 billion of Canadian goods began at midnight, with Canada retaliating starting September 8 by targeting US steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, Insurance Business reports.
The outlet says the collapse changes trade credit insurance decisions because uncertainty over whether tariffs would occur is now a confirmed, dated reality on both sides of the border. It notes that just about 5% of Canadian export businesses, or roughly 7,000 to 10,000 companies, currently carry trade credit insurance even as inquiries have increased.
Insurance Business adds that a confirmed schedule gives brokers a basis to move clients from interest to actual coverage instead of waiting out uncertainty. It also cites EDC, which has deployed $5 billion in capacity through its Trade Impact Program for tariff-affected exporters, including credit insurance, financing, and guarantees.
For exporters and importers, the publication highlights that tariff costs can strain cash flow beyond any export-side credit claim. It also says businesses should review input supply contracts for how tariff cost increases get allocated, and revisit surety and performance bond exposure, while warning that higher tariffs can increase the risk of mislabelling or transshipping to avoid duties.