Canada and Mexico are major suppliers for construction materials and auto parts in the U.S. (Credit: Jeerawut/Adobe Stock)
President Trump’s new tariffs will slow down rebuilding efforts from recent natural catastrophes, according to the American Property Casualty Insurance Association (APCIA).
Starting Tuesday, the United States began collecting a 25% tariff on nearly all goods from Canada and Mexico, including construction materials and car parts. Additionally, a 10% tariff was placed on imports from China, on top of a 10% tariff that went into effect last month.
About 70% of the dimensional lumber and drywall gypsum used in residential construction is imported from Canada and Mexico respectively, according to Realtor.com.
The tariffs “will likely disrupt vital reconstruction material supply-chains at a critical moment of rebuilding from recent catastrophes, including hurricanes Helene and Milton and the unprecedented California wildfires,” said David Sampson, APCIA president and CEO, in a statement. “The impacted areas already face reconstruction challenges, and the added increased cost burdens will likely significantly affect the recovery efforts.”
The tariffs are also expected to raise the price of cars and auto parts, many of which come from Canada and Mexico. This would increase the cost of claims for insurers: APCIA estimates annual personal auto insurance claims cost alone could increase by anywhere from $7 billion to $24 billion.
“Tariffs can be effective tools of government if used with precision,” Sampson said. “However, these new tariffs are so broad that they are likely to hurt families, individuals, and business owners they are meant to protect. All of these increased costs would adversely affect home, auto, and business insurance affordability nationally, at a time when the marketplace is already plagued by legal system abuse and regulatory uncertainty.”
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.