Trade impact with US escalates as Canadian protest movement spreads

As the Canadian demonstrators blocking access to the vital Ambassador Bridge connecting Detroit and Windsor, Ontario entered a fourth day with no end in sight, the bilateral trade impact of the protest movement against COVID-19 measures is rapidly escalating. This is especially the case for the supply chain-dependent integrated automobile sector.

The crisis has reached the point of being followed closely at the White House. And today it was the turn of Michigan governor Gretchen Whitmer (D) to raise a blunt cry of alarm.

The surprise blockade movement began when the self-described “Freedom Convoy” descended on the federal capital, Ottawa, on Jan. 28 to protest the government’s move to require that Canadian truck drivers crossing the U.S. border be fully vaccinated. It has since broadened into a protest against all public health measures aimed at fighting the COVID-19 pandemic. The organizers affirm they will not end their protest until all measures are dropped.

It remains unknown for how long the Trudeau government (defending a science-based policy) will allow the blockades to continue without taking stronger intervention.

While the virtual occupation of downtown Ottawa has continued, with serious consequences for local citizens and businesses, the anti-mandate protesters have paralyzed normal traffic flow at Ambassador Bridge and two other border locations in Alberta and Manitoba.

The Canada Border Services Agency has closed the Ambassador Bridge to commercial traffic and is diverting trucks to Blue Water Bridge in Sarnia, Ontario. But wait times have exceeded four hours to make the short trip across the border to Port Huron, Michigan.

In this regard, FourKites 3PL reported “a continuing decline of on-time delivery percentage for deliveries from Canada to the US,” likely due to the effects of the protests and blockades.

Michigan Gov. Gretchen Whitmer said the protest is hurting “Michigan’s working families who are just trying to do their jobs,” noting the Ambassador Bridge is the busiest land border crossing in North America.

This was no under-statement. This bridge alone accounts for 30% of total Canada-US trade. Up to $500 million in goods crosses it every day, carried by 8,000 to 10,000 trucks daily. Canada is Michigan’s top customer, and Michigan sells more to Canada than to its next eight largest foreign markets combined.

“It is imperative that Canadian local, provincial and national governments de-escalate this economic blockade,” governor Whitmer said. “They must take all necessary and appropriate steps to immediately and safely reopen traffic so we can continue growing our economy, supporting good-paying jobs and lowering costs for families.”

Auto sector supply chain problems

In the automobile sector, Toyota Motor Corp indicated its plants in Ontario and Kentucky have been affected by the Ambassador Bridge blockade by aggravating supply chain problems.

Ford Canada briefly shut down production at its Windsor engine plant on Wednesday. Its facilities in both Windsor and Oakville, Ont. was running at “reduced capacity” today. Same scenario for Honda Canada’s facility in Alliston, Ont.

General Motors Canada confirmed that its plants were still running today (Thursday), although one of the company’s American facilities shut down a production line on Wednesday due to part shortages.

The Canadian Trucking Alliance, which has previously reported that 90% of its members are vaccinated, called on all levels of government to put an end to blockades disrupting borders and critical trade routes. A similar appeal was made earlier this week by dozens of Canadian and US chambers of commerce and industry groups.

“Many of those who are protesting having their lives disrupted by certain policies are, in turn, ironically disrupting the lives of their fellow Canadians,” Stephen Laskowski, president of the Canadian Trucking Alliance, declared.

“Whether it’s the dedicated truck driver who’s stuck at the border and unable to get home to his or her family or the factory worker who is sent home from work because critical products and raw materials aren’t being delivered, the only people who these blockades hurt are the hard-working Canadians who have kept our nation moving,” Laskowski stressed.