As the implementation of steel and aluminum tariffs by the U.S. President Donald Trump commences, Canadian companies are making an effort to adapt and strategize.
Kevin Fujita, a joint proprietor of CSN Kustom in Coaldale, expects an inevitable rise in the prices of parts. He anticipates that the impact on his business in southern Alberta will eventually trickle down to consumers who will have to bear the brunt of the price increase.
He pointed out that their industry is fortunate to have insurance to cover a majority of the costs. However, this means that consumers and insurance firms will primarily bear the costs, leading to a direct impact on the customers’ pockets.
Aaron Sutherland, the vice president of the Insurance Bureau of Canada, reiterated this sentiment, emphasizing the potential widespread effect of the 25% steel and aluminum tariffs announced by Trump. He underlined that as the cost of these metals rises, it will inevitably affect the price of auto parts and vehicles manufactured in the U.S. and shipped back to Canada.
Sutherland explained that the increased cost of auto parts will reflect in auto insurance claims, thereby affecting auto insurance premiums. He expressed concern about any form of trade war, even if it only applies to steel and aluminum.
Despite certain consumer protection measures in Alberta regarding insurance, Sutherland foresees impacts on everyday drivers. He mentioned that the government has imposed an auto insurance rate cap, which prevents insurers from passing on the increased cost of vehicle parts and materials to consumers.
However, this might compel auto insurers to limit their offerings because if they can’t accurately price for it, they’re unable to sell it. This situation underscores the need for businesses to be prepared.
Fujita echoed this sentiment, emphasizing the need to deal with the situation on a case-by-case basis. He expressed gratitude for their industry’s insurance network, which allows them to continue with their day-to-day operations despite the challenges.
As the uncertainty continues, businesses must prepare and adapt to these changes. The implementation of these tariffs serves as a reminder of the potential impacts of trade wars on industries and consumers alike. It underlines the importance of adaptability and strategic planning for businesses in changing economic climates.
