The American Property Casualty Insurance Association (APCIA) is warning that proposed U.S. tariffs could increase personal auto insurance claim costs by as much as $60 billion over the next year, while also destabilizing long-standing international trade relationships.
According to David Sampson, president and CEO of the APCIA, the association estimates tariffs could increase claim costs by an estimated $30 billion to $60 billion for personal auto insurance alone over a 12-month period.
The insurance industry relies on globally sourced materials like steel, lumber and heavy machinery, all of which could become significantly more expensive under new tariffs, Sampson said.
While tariffs may not produce a direct one-to-one rise in repair costs, Sampson noted the indirect impacts -- including delays, price volatility and supply chain disruption -- pose significant risks. “For insurers, that translates into greater uncertainty around claims severity, reinsurance pricing and asset planning,” he said.
Beyond the insurance sector, the broader economic ramifications of the tariffs could shift the global order. Sampson warned that economic divisions are increasingly supplanting traditional geopolitical alliances.
“The line between allies and adversaries has been blurred, as strategic ideological partnerships no longer guarantee exemption from economic rebalancing among countries,” he said.
Tariffs targeting Southeast Asian nations such as Vietnam and Indonesia, once seen as alternatives to China in global supply chains, could reach 30% to 50%, undermining U.S. policy objectives aimed at reducing reliance on Chinese manufacturing.
The ripple effects extend to key allies like Japan, where domestic industries could suffer, raising doubts about continued security cooperation with the U.S.
“The sudden imposition of tariffs may also accelerate efforts by U.S. allies to expand alternative economic partnerships to hedge against a less-reliable United States,” Sampson said.
Ultimately, even if tariffs are reversed, the damage may already be done. Sampson cautioned that such reversals could still “reinforce the growing perception of the U.S. as an unreliable or self-interested actor.”
