Trump tariffs hit Mexico and Canada
- MMGMC
- Mar 27
- 2 min read
Recent reports predict that car insurance premiums will surge if President Trump carries out his threat to tax metals imported from Canada and Mexico next month.
There is no such thing as a “100% American-made car” due to large volumes of auto parts coming from Canada and Mexico, according to Bankrate.
The financial services company said Friday in a report that it could take “several months” to gauge the impact of the upcoming tariffs. As of this month, Bankrate estimates that full car insurance coverage averages $223 a month and minimum coverage $67.
“While slowing inflation can help create more favorable economic conditions, tariffs on U.S. imports are likely to increase auto insurance rates in the coming years,” said Shannon Martin, a Bankrate insurance expert.
Mr. Trump imposed 25% tariffs on aluminum and steel imports this month but agreed to postpone applying them to Canada and Mexico until April 2.
The digital insurance agency Insurify estimates that applying the tariffs to Mexico and Canada, which have benefitted from a trade agreement Mr. Trump signed in 2019 during his first term, will increase premiums by an average of 8% nationwide by the end of this year, from $2,313 to $2,502 annually.
That’s up from a 5% annual increase in insurance premiums since 2022 and a 3% yearly bump before the pandemic.
“As the price of replacement parts increases, premiums will have to increase accordingly,” said Daniel Lucas, Insurify’s carrier relations manager.
According to separate reports from Insurify and S&P Global Market Intelligence, car insurance rates surged 12% in 2021 amid a spike in reckless driving during pandemic travel restrictions.
The annual rate of increase has remained elevated since 2022 as global supply chain disruptions struggle to keep pace with pent-up demand for cars and auto repairs from drivers returning to the road.
Insurify estimates that Mexico and Canada accounted for about 35% of U.S. steel imports in 2024 and one in every five cars and light trucks sold nationwide.
Reached for comment, some industry insiders said the increase in insurance premiums will depend on how quickly next month’s tariffs impact auto suppliers.
Others predicted the tariffs would never hit Canada or Mexico at all, despite the Trump administration’s threats.
“Much of the tariff bluster coming from the Trump administration is negotiation tactics, and judging by the outrage of the media, it’s working,” said Hans Dau, founder of Mitchell Madison Group business consulting firm. “Both Canada and Mexico are so incredibly dependent on US trade that they will just cave.”
Mr. Dau noted that 77% of Canada’s exports accounting for nearly one-fourth of its Gross Domestic Product go to the U.S., as do 80% of Mexico’s imports representing about 30% of its GDP.