A leading insurance industry group is warning that proposed US tariffs could drive up personal auto insurance claim costs by as much as $60 billion over the next year, while straining international trade relationships.
The American Property Casualty Insurance Association (APCIA) estimates the added costs for personal auto claims alone could range between $30 billion and $60 billion over a 12-month span, according to its president and CEO, David Sampson.
Sampson said the insurance sector is heavily dependent on globally sourced materials such as steel, lumber and machinery — all of which could become more expensive under the proposed tariffs, according to a report by Auto Body News.
While higher tariffs might not translate directly to increased repair bills, Sampson pointed to indirect consequences such as supply chain disruptions, price swings and delays as potential drivers of cost volatility. “For insurers, that translates into greater uncertainty around claims severity, reinsurance pricing and asset planning,” he said.
Beyond the insurance industry, Sampson warned the broader economic impact could upend longstanding global alliances, with economic divides increasingly overshadowing traditional geopolitical ties.
“The line between allies and adversaries has been blurred,” he said, adding that ideology alone may no longer shield countries from economic shifts.
Tariffs on nations like Vietnam and Indonesia — once seen as key alternatives to China in global manufacturing — could climb as high as 50%, potentially undermining US goals to diversify supply chains away from Chinese dependence, Sampson said.
Sampson also raised concerns about the potential fallout for allies such as Japan, where industries reliant on exports could face new challenges. That, in turn, may prompt allied nations to rethink their economic and security ties with the United States.
Even if the tariffs are eventually lifted, the long-term damage to America’s global standing could persist, Sampson cautioned. He warned that such reversals could “reinforce the growing perception of the US as an unreliable or self-interested actor.”
