Escalating blockades at the Canada-U.S. border are weakening one of the most fragile links in the vital North American supply chain – a link that has nothing to do with transport trucks, highways or bridges.
Rather, it’s the mood in the United States, particularly when it comes to issues like globalization, international trade and making things in America, that may pose the biggest danger over the long term.
Michigan Rep. Elissa Slotkin complained Wednesday about a General Motors plant outside Lansing that’s being starved of parts from Canada by the ongoing closure of the border crossing between Detroit and Windsor, Ont.
Her politically charged solution is the sort of thing that keeps Canadians up at night.
“It doesn’t matter if it’s an adversary or an ally – we can’t be this reliant on parts coming from foreign countries,” Slotkin tweeted.
“The one thing that couldn’t be more clear is that we have to bring American manufacturing back home to states like Michigan. If we don’t, it’s American workers like the folks at Delta Township who are left holding the bag.”
It’s hardly a new sentiment: U.S. protectionism has been a fact of life, off and on, for decades. But even a year removed from Donald Trump’s turbulent turn as president, it’s very much on – thanks in large measure to Trump’s successor.
“They’ll use American parts, American iron, American steel,” President Joe Biden gushed earlier this week as he announced Australian manufacturer Tritium’s plan to build electric vehicle charging units in Tennessee.
“I made it clear from Day 1: when the federal government spends taxpayers’ dollars, we’re going to buy American: American products made in America, including American component parts.”
Canada’s not especially fussed about Biden’s specific Buy American policies when it comes to federal infrastructure projects; it has negotiated carve-outs to those rules before, most recently under Barack Obama in 2009.
But experts warn that the drumbeat of protectionist rhetoric has an effect over time, particularly at the state and local level, where Canadian suppliers and contractors potentially face a more serious threat.
“We are joined together as one,” said Maryscott Greenwood, CEO of the Canadian American Business Council.
“The big risk and danger of the border uncertainty is that the Canada-U.S. economic relationship is one organism – you can’t say, ‘Well, we don’t really need the heart, because we’ve got the lungs.’
“We have to get back to the point where the two countries together are figuring out how to keep the patient healthy.”
Expose a weakness in the deep ties in the Canadian and U.S. auto sectors, such as using a handful of cars and trucks to shut down one of the most lucrative trade corridors on the continent, and that drumbeat gets louder.
The auto-sector ties between Windsor and the U.S. are too strong, having been forged over more than a century, to be severed by a “singular event,” said Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association.
Costly long term effects
But the longer-term effects of a protracted border shutdown could be costly, Volpe told a news conference Thursday as stakeholders in Windsor sought a court injunction to end the protest.
“I do think If we don’t take some action here to clear the border, I think it may have some effect at least in the short to mid-term on whether new investments would favour Windsor over the other side of the bridge.”
Rakesh Naidu of the Windsor Chamber of Commerce said he’s worried about the protests having a dampening effect on the city’s economy.
“The concerns that we have are, what will the American customers, the American clients, think of the situation and will this lead to them rethinking the supply chain that extends into Canada,” Naidu said.
“The American customers may look the other way and not want to have a concern like this come up in the future.”
Matt Moroun, whose family owns the Ambassador Bridge linking Windsor with Detroit, urged the federal government in Ottawa to do something to clear the blockade.
One option, he said, would be to end the requirement that’s at the heart of the protests: that truckers taking shipments across the Canada-U.S. border have to be vaccinated against COVID-19 to do so.
“The Ambassador Bridge and all international border crossings are critical to international trade. Without them, commerce and our shared economies will grind to a halt,” Moroun said in a statement.
“That is exactly what is happening right now and we are all just beginning to feel the devastating impact.”