The ‘Freedom Convoy’ or truckers’ protest against COVID-19 mandates has been raging in Canada since the starting of February, causing blockade on the vital trade link between United States and Canada. In order to bring the situation ‘under control’, Canadian Prime Minister Justin Trudeau invoked the National Emergency Act yesterday. The Act was last enacted in 1988 and will be active for the next 30 days. Under the Emergency Act, there will be stronger tools for law enforcement to disperse gatherings of protesters, including at major border trade routes connecting Canada to the United States.
We cannot and will not allow illegal and dangerous activities to continue.”~ Justin Trudeau
Trudeau’s decision drew immediate criticism as it has been suspected that there was pressure from the US for taking immediate action to ‘control the crisis’. The Toronto Star, Canada’s highest circulated newspaper and usually a pro-Trudeau outlet, featured an editorial headlined: “Invoking the Emergencies Act is a shocking admission of failure.”
Last month, The Trudeau Government had issued a COVID-19 mandate for all truckers entering Canada, which triggered the Freedom Convoy and affected the trucking routes to Ontario, British Columbia, Manitoba and Alberta. However, recently several provinces in Canada have either lifted these mandates or are planning to do so.
Among all the trading routes between US and Canada, the Ambassador suspension bridge is a vital one – registering more than 40,000 commuters and trucks carrying USD 323 million worth of goods across, every day. The Bridge connects Detroit, Michigan and Windsor, Ontario, and with no other alternate route, it has been afflicted by the biggest disruption/blockade. The auto industry has been dependent on the Bridge since the last 5 decades and even the smallest delays via this route can cause the auto plants working on ‘just-in-time’ inventories, to shut down.
White House Press Secretary Jen Psaki said US officials were “in very close contact” with Canadian border agencies about the bridge blockade. Psaki also expressed concerns about the impacts of the protests on the US economy, saying the action “poses a risk to supply chains, to the auto industry.”
Several commerce and industry associations, from both US and Canada, are urging for the bridge to be cleared as they dread disruptions to the supply chain. COVID-19 and the restrictions that came with it have already damaged cross-border trading between US and Canada to a large extent and it becomes rather imperative for the blockade to be cleared to avoid hampering the recovery phase. Another trade link between Coutts, Alberta and Sweet Grass, Montana has also been blocked by protesters for several days.
According to sources, Mayor of Windsor, Drew Dilkens is concerned about the long term impact of these protests on Canadian businesses. Around 5,000 workers were sent home early on Tuesday and many auto-assembly plants are preparing to close – all a result of the protests. The ravages of the Canadian protests are resonating towards US as well, considering that the auto industry relies on timely delivery of parts across the Bridge.
The auto sector “is a significant portion of the economy and an important portion of consumer spending” that has been hard hit over the past year, said Michelle Krebs, a senior analyst with Autotrader in Detroit. There were gradual improvements after October’s inventory and production disruption low point, “but this (protest) could be a setback if it lingers.
Canada’s Minister of Transport Omar Alghabra called the protests ‘an illegal economic blockade against all Canadians’ as the trade disruption caused due to the Ambassador Bridge blockade alone is estimated to be USD 300 million every day. In Canada, Toyota and Ford had to suspend production and General Motors in the US has also suffered the same fate. This comes at a time when the global automotive industry has already been grappling to revive with the ongoing semi-conductor shortage.