Get Ready for More Supply Chain Disruptions
Thanks to upcoming glitches with our trading partner, Canada
Which country is America’s biggest trading partner? If you answered “China” — sorry, that answer is incorrect. Canada is actually the United States’ largest trading partner. Or, at least, it was…
The relationship between the two countries is mutually beneficial. Canada is the top export market for American products, taking 17.9% of our total in 2020. An astonishing $1.7 billion in goods and services are traded every day.
Here are a few more facts:
- 32 American states list Canada as their number one export market
- Total U.S. exports to our neighbor to the North exceed the totals we send to China, Japan and Taiwan combined.
- In 2020, the United States exported $310 billion to Canada in both goods and services; of these, services accounted for $53.6 billion.
- While agriculture accounted for $22 billion in exports, machinery and vehicles were the top categories at $39 and $38 billion
Obviously this arrangement is mutually beneficial and has led to jobs for citizens of both countries. In 2019, 836,000 Americans were employed directly by Canadian businesses and many more work for American firms that supply Canada. The two countries also heavily invest in each other, including contributing to each others’ research and development. Canada is also a fellow free country — when we buy goods from Canada we are not propping up a dictatorship, supporting child labor, or ignoring human rights abuses.
Unfortunately, we may be about to throw a wrench into the works.
The reason is the pandemic. As of January 22, about 12,000 Canadian truck drivers will not be allowed to enter the United States. This follows Canadian restrictions against American truck drivers.
The Canada Border Services Agency (CBSA) earlier eliminated vaccine mandates for truck drivers due to severe supply and labor shortages. However, unvaccinated truck drivers must quarantine for 2 weeks. According to truck drivers protesting along the US border with Manitoba, this will have a ruinous effect on trucking companies’ finances and lead to smaller firms going out of business.
In response to Canada’s new rules, the United States decided to contribute its share to the evolving supply chain crisis. Starting January 22nd, all drivers coming across American borders must be fully vaccinated. Since over two-thirds of trade between the U.S. and Canada occurs via road, any disturbance in this exchange will significantly affect customers in both countries.
The Canadian Trucking Alliance (CTA) estimates that the vaccine mandate will force up to 10% (16,000) of Canadian truckers off the road. “There isn’t one aspect of the supply chain that won’t be impacted,” warned CTA President Stephen Laskowski.
Mexico’s drivers will be less affected by this law as the US typically does not allow trucks to pass the border.
According to the Canadian Trucking Alliance, 10 to 15% of Canadian truck drivers are unvaccinated. The mandate would therefore affect over 12,000 Canadian truckers. This sharp reduction will have a horrible impact on an area already facing labor shortages.
The situation is even more grim when you look at American truck drivers, of whom only 55% are currently vaccinated; 9% plan to take the vaccine, but 36% refuse.
For consumers already impacted by bare shelves, things are only going to get worse.