Why the Ambassador Bridge is important to the two countries’ economies

The largest trading partner of the United States is not China or Mexico. That is Canada.

And the Ambassador Bridge, which separates the United States from its neighbors to the north, is possibly the most economically important one-and-a-half-mile stretch of road in the Western Hemisphere. Until last week, it received little attention because of its vital role in the economies of the two countries.

A total of $664 billion worth of goods were transferred between the two countries last year, according to data from the US Department of Commerce. The state of Michigan estimates 30% of the total has moved across the privately owned Ambassador Bridge connecting Detroit and Windsor, Ont. An estimated 10,000 commercial vehicles cross the bridge every day.

But not last week.

Protesters angered by vaccine mandates in Canada essentially closed the bridge starting Monday night, and halted the flow of goods across the bridge by blocking ramps on the Canadian side. Business groups have voiced alarm at the huge costs caused by the closures, but police did not move to clear the bridge and arrest protesters until Saturday morning. (As of late Saturday afternoon, the bridge remained essentially blocked off by protesters.)

The reality is, the economies of Canada and the United States are inextricably linked in ways that citizens of both may not realize or disregard.

Since goods often move across borders with limited duties or other taxes, factories on one side of the border depend on suppliers from the other. Experts say that not a single car is made in the United States without Canadian parts, and vice versa.

Although Canada does not have its own locally owned auto industry, it is home to the factories of most of the major global automakers serving North America, including General Motors, Ford, and Ford. owners of Chrysler, Stellantis, Toyota and Honda.

In 2021, the United States imported more than one million finished vehicles from Canada, worth about $25 billion. Canada, with a population of about one-ninth of the United States, imported 750,000 U.S. vehicles worth about $14 billion in the same time frame, according to data from research firm IHS Markit.

“Essentially, auto supply chains treat that border like a state border,” said Bernard Swiecki, director of research at the Center for Automotive Research, a Michigan-based think tank. “Financially, that international border may not be there either.”

The difficulty of moving goods between countries this week has created a host of economic problems, and not just in Michigan, where this week workers lost about $51 million in wages due to the lockdown. , or in Windsor, Ontario, is considered the Detroit of Canada.

Plants as far away as the Toyota plant in West Virginia, Kentucky and Alabama, as well as the Ford plant that makes Super Duty pickups in the Cleveland suburb of Avon Lake, Ohio, were forced to suspend or reduce their operations. Also, a factory in the Toronto suburb of Brampton, Ontario produces Chrysler 300s, Dodge Chargers and Dodge Challengers.

The Great Lakes separating the eastern United States and Canada limits the number of places that can cross the border by land between the eastern part of the two countries. Although there is a tunnel between Detroit and Windsor, it is often closed to commercial traffic because it does not have the customs facilities that the bridge has.

Another bridge connects Port Huron, Michigan, and Sarnia, Ontario, but the route includes a 150-mile detour and it had its own protests this week, prompting trucks to attempt to cross the border. It’s very risky there.

High 152 feet above the Detroit River, the 92-year-old Ambassador Bridge is just two lanes wide in both directions.

A replacement bridge is under construction about a mile away, but it won’t open for at least two more years. It will have three lanes in each direction and is named for Gordie Howe, the Canadian-born hockey superstar who played for the Detroit Red Wings.

While the auto industry got the most attention this week due to its concentration in Detroit and Windsor, it’s not the only industry dependent on demand.

“A lot of manufacturing, a lot of goods, depends on the bridge. It’s not just cars,” said Stephanie Brinley, principal analyst at IHS Markit.

She said the closures come at a bad time for the automaker and other manufacturers. Global supply chain problems have caused widespread delays and shortages and increased prices of parts and raw materials, forcing many to cut production.

All major automakers had periods last year when they were forced to temporarily close factories or cut production, as did some manufacturers in other industries.

Those factors are the main factor driving prices in the US up at the fastest rate in nearly 40 years. While the week-long Ambassador Bridge closure is unlikely to have an impact on car prices for consumers, it has increased costs for automakers, who have to pay extra for transportation. goods by air.

“Our supply chain is pretty fragile right now,” says Brinley. “We don’t need another twist in the works.”

– CNN’s Miguel Marquez contributed to this report.

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