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Trade Clashes Put Arcane Product on the Map

The Trump administration’s moves to place tariffs on metals and other imports from China have created new opportunities for underwriters of trade credit insurance.
July 10, 2018

The Trump administration’s moves to place tariffs on metals and other imports from China have created new opportunities for underwriters of trade credit insurance. The coverage generally protects companies from the risk that buyers will be unable to pay the imposed tariffs, and policies will reimburse policyholders for defaulted payments. The global market is about $7 billion of premiums, mostly in Europe, according to the International Credit Insurance and Surety Association, but $1 billion of that is attributed to companies in the United States.

Protectionism could help boost American demand for the coverage, according to Evan Freely, a managing director in the political risk and trade credit group at Marsh, a unit of Marsh and McLennan Cos. That would be driven by companies that rely on products from tariff-affected countries like China, he said.

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