Impact of U.S. Tariffs on Trucking Industry and Commercial Auto Insurance

The potential impact of tariffs on the trucking industry and commercial auto insurance is becoming increasingly important to monitor. From expected increases in equipment costs to emerging liability considerations, transportation companies are facing growing pressure to reassess how they operate and get insured in a market influenced by shifting trade policies.

The latest round of U.S. tariffs—including new levies on vehicle imports and parts—is sending ripples through the trucking industry. While media coverage may focus on high-level trade negotiations, it is the trucking companies and drivers moving freight every day who are positioned to feel the greatest impact.

The current situation draws parallels to the COVID-19 pandemic’s effect on transportation. During the pandemic, freight volumes dropped sharply before rebounding amid inventory restocking and panic-driven demand. The result: widespread volatility in freight rates and delivery timelines.

Today, new tariffs have created a similar dynamic—a surge in imports ahead of implementation, followed by expected reductions in consumer spending and freight activity. If historical patterns repeat, the trucking sector may face another wave of instability, with smaller operators absorbing much of the strain.

How Tariffs Are Impacting Freight Volume and Trucking Operations

Trucking has long been a fragmented industry. However, current economic pressures may accelerate consolidation.

Rising costs—from fuel and inflation to tariff-inflated vehicle and parts prices—are already putting pressure on small and mid-sized fleets. Many may be forced to close or merge, unable to keep up with shrinking profit margins due to rising equipment and maintenance costs. While this could create opportunity for larger carriers, the short-term result will likely be reduced freight capacity.

Meanwhile, those who remain may become more selective about the loads they haul. With higher operating expenses and thinner margins, truckers are likely to prioritize:

• Cargo with high margins or guaranteed rates,

• Shorter, more predictable routes,

• Customers with strong reputations and fast payment terms.

This shift toward selectivity could disrupt sectors that rely on low-cost, high-volume freight moving—potentially creating new supply chain bottlenecks in consumer goods, agriculture, and retail.

The Impact of Tariffs on the U.S. Trucking Industry

To understand the full picture, it's important to analyze the impact of tariffs on the trucking industry through six key dimensions:

Political impact

Tariffs are unpredictable instruments of policy. Their implementation can shift quickly, requiring carriers—especially those involved in cross-border operations—to adjust routing and pricing strategies with little notice. There is also ongoing risk of retaliatory trade actions that could further affect freight volume and complexity.

Economic impact

Tariffs on imported trucks and parts are likely to increase equipment costs significantly. A 25% tariff on a new Class 8 truck could raise its price by up to $35,000, according to The American Trucking Associations. Combined with fuel volatility and inflation, this creates margin pressure across the board and could lead to reduced investment in fleet upgrades and higher trucking business closures.

Social impact

Reduced freight demand may lead to employment instability. With fewer loads, drivers may experience job insecurity, especially newer entrants or owner operators. At the same time, public frustration with higher prices or slower delivery times may amplify pressure on carriers to meet unrealistic expectations.

Technological impact

Budget constraints may cause some operators to postpone technology investments, slowing progress toward automation, electric vehicles, or AI-driven logistics optimization. However, some may turn to digital tools—such as telematics or load-matching platforms—to optimize routing and reduce overhead without expanding headcount.

Legal impact

Trucking companies engaged in cross-border trade may face a heavier regulatory burden. Tariffs typically bring new customs procedures and documentation requirements. In addition, freight contracts may need to be renegotiated to account for cost increases, leading to more administrative and legal friction.

Environmental impact

Environmental progress may be hindered. Fleets may extend the life of older trucks to avoid high replacement costs, potentially increasing emissions. In addition, freight rerouting to avoid tariffed ports or regions could lead to longer hauls and greater fuel consumption.

The Impact of Tariffs on Commercial Auto Insurance Coverage and Premiums

As tariffs reshape the cost structure and operational strategies within the trucking industry, their influence may also be felt across the commercial auto insurance landscape. While much of the attention goes to physical damage premiums, the ripple effects might extend to liability coverage, underwriting practices, and the overall insurability of transportation carriers.

Here’s how the impact might unfold across four key areas:

1. Rising Equipment Costs May Drive Up Physical Damage Premiums

With tariffs increasing the cost of imported trucks and critical replacement parts, the insured value of commercial vehicles will rise. Physical damage coverage—which is priced based on replacement costs—may be directly affected.

Even older trucks may see higher premiums as parts become more expensive and repair turnaround times lengthen. For fleets that delay replacing aging equipment, longer vehicle life cycles can also lead to more claims and maintenance-related risk, further affecting coverage rates.

2. Stricter Underwriting and Reduced Carrier Appetite

As the market contracts and economic volatility increases, insurers may respond by tightening underwriting criteria. Carriers may now face:

• Requests for more detailed safety documentation,

• Requirements for telematics or ELD data to validate risk levels,

• A reduced appetite for certain cargo types, regions, or small fleets with minimal loss history.

Even minor past violations or a few claims can lead to fewer available options or rate hikes at renewal. In this environment, maintaining clean safety records and following solid risk management practices has never been more important.

3. Liability Coverage: A Complex Risk Picture

While a reduction in active trucks on the road could, in theory, reduce the total number of accidents, the reality is more nuanced: fewer trucks may reduce collision frequency, but… The remaining fleets may face increased pressure, leading to longer hauls, tighter delivery schedules, and heightened fatigue—all of which elevate commercial auto liability risk. Additionally, older vehicles with fewer safety features are more likely to be involved in severe accidents, especially when replacement is delayed due to cost.

As a result, commercial auto liability premiums may not decrease—and in some segments, they may continue to rise, especially where claim outcomes have been trending higher.

4. Flexible and Usage-Based Insurance Models Might Gain Traction

With fewer miles driven, some truckers may benefit from usage-based or mileage-based insurance models. These flexible products align costs with actual exposure and may offer savings during periods of reduced activity.

With freight demand fluctuating, many carriers are re-evaluating how and how much they drive. In response, commercial auto insurers are offering more flexible policies, including:

• Usage-based pricing, where premiums are adjusted based on actual miles driven,

• On-demand or seasonal coverage, suitable for part-time operators or specialized lanes,

• Telematics-integrated models, where driver behavior influences pricing.

For transportation carriers adjusting routes or running leaner, these adaptive models may provide a way to align coverage costs with real exposure, offering a level of financial relief without compromising protection.

Adapting Commercial Auto Insurance Strategies Amid Tariff-Driven Market Changes

The commercial auto insurance landscape is evolving alongside the freight economy. Tariffs may have started as a trade policy measure, but their ripple effects may be felt in every corner of a trucking operation—including how risk is measured, managed, and insured.

As premiums may adjust and underwriting tighten, carriers that embrace data transparency, disciplined safety practices, and strategic freight choices will be best positioned to maintain affordable and effective coverage.

At STAR Mutual RRG, we remain committed to supporting trucking professionals through cycles of volatility with responsive insurance solutions and insights tailored to the realities of the road.

This article is provided for informational purposes only and should not be constitued as legal or business advice. Readers are encouraged to consult with a qualified attorney or advisor regarding any legal or regulatory questions specific to their situation.

Please note that the policy landscape surrounding tariffs and trade regulations remains highly dynamic, with new developments emerging frequently. The insights shared in this article reflect the current understanding at the time of publication and may be subject to change.