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US-Canada tariffs raise cross-border insurance and credit risk
The 50% tariffs cover about $20 billion of Canadian exports to the US starting at midnight, with Canada’s “dollar for dollar” retaliation beginning September 8 and targeting additional US products.
Trade negotiations between the US and Canada collapsed Friday night, and 50% tariffs on about $20 billion of Canadian goods took effect at midnight, under a provision of the Tariff Act of 1930 that had not been used since 1949, according to Insurance Business.
Canada said it will retaliate “dollar for dollar” beginning September 8, and Canadian Prime Minister Mark Carney suspended talks shortly before the deadline, calling the US final demands “uneconomic” and “unfair,” while the US Trade Representative Jamieson Greer blamed Canada for walking back earlier commitments.
The tariffs include a broad set of Canadian exports such as wine, furniture, dairy products, cement, clothing, fishing rods, and hockey equipment, which Canada estimates represent roughly 5% of what it shipped to the United States last year. Separately, Canada confirmed its retaliatory tariffs will begin Tuesday, September 8, targeting US steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, though the full product list had not been published as of Sunday.
Insurance Business said the insurance implications extend in two directions for US firms with cross border exposure. US exporters face a confirmed pricing shock as the tariff landings start September 8, and for exporters that extended credit terms to Canadian buyers, the tariff changes the buyer’s economics immediately, shifting the credit risk on trade receivables.