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Why the Ambassador Bridge is crucial to the economies of two nations

By Chris Isidore, CNN Business

(CNN) — The United States’ largest trading partner is neither China nor Mexico. It’s Canada.

And the Ambassador Bridge, which separates the United States from its northern neighbor, is perhaps the most economically important one-and-a-half-mile road in the Western Hemisphere. Until last week, it received very little attention for the crucial role it plays in the economies of both nations.

A total of $664 billion worth of goods moved between the two countries last year, according to data from the US Department of Commerce. The State of Michigan estimates that 30% of the total was moved on the private Ambassador Bridge linking Detroit and Windsor, Ontario. Approximately 10,000 commercial vehicles cross the bridge daily.

But not last week.

Protesters angered by Canada’s vaccination mandates basically close the bridge from Monday evening, and halted the flow of goods on the bridge by blocking the ramps on the Canadian side. Business groups sounded the alarm about the huge costs caused by the closure, but the police did not move to clear the bridge and arrest protesters until Saturday morning.

Sunday morning the bridge was still basically blocked. Canadian police reported arrests were in progress and vehicles are being towed, and urged the public to stay away. Authorities are taking steps to prevent future blockages and hope the bridge will be open by Sunday afternoon.

The fact is that the economies of Canada and the United States are intertwined in ways that citizens of both probably don’t realize or take for granted.

Since goods usually cross the border with limited tariffs or other taxes, factories on one side of the border depend on suppliers on the other. Experts say there is no American-built car without Canadian parts, and vice versa.

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

In 2021, the United States imported more than one million completed vehicles from Canada, worth approximately $25 billion. Canada, which has about one-ninth the population of the United States, imported 750,000 American vehicles, worth about $14 billion during the same period, according to data from research firm IHS. markit.

“Essentially, automotive supply chains are treating this border as if it were a state border,” said Bernard Swiecki, research director at the Center for Automotive Research, a Michigan think tank. “Financially speaking, that international border might as well not be there.”

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

Plants as far apart as Toyota plants in West Virginia, Kentucky and Alabama, as well as a Ford plant producing Super Duty pickup trucks in the Cleveland suburb of Avon Lake, Ohio, were forced to temporarily shut down or reduce their operations. Sodid a plant in the Toronto suburb of Brampton, Ontario, which builds Chrysler 300s, Dodge Chargers and Dodge Challengers.

The Great Lakes separating the eastern United States and Canada limit the number of places where it is possible to cross the border by land between the eastern part of the two nations. Although there is a tunnel between Detroit and Windsor, it is generally closed to commercial traffic as it lacks the bridge’s customs facilities.

Another bridge connects Port Huron, Michigan, and Sarnia, Ontario, but the route involves a 150-mile detour, and it has had its own share of protests this week, making it risky for trucks to try to cross the border there.

Soaring 152 feet above the Detroit River, the 92-year-old Ambassador Bridge is just two lanes wide in either direction.

An alternative bridge is under construction about a mile away, but it is not expected to open for at least two years. It will have three lanes in each direction and will be named after Gordie Howe, the Canadian-born hockey superstar who played for the Detroit Red Wings.

Although the auto industry has captured the spotlight this week due to the industry’s concentration in Detroit and Windsor, it’s not the only industry dependent on the bridge.

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

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

All major automakers have had periods in the past year when they were forced to temporarily close factories or the production of gaskets, as some manufacturers in other industries have done.

These factors have been a major factor in the United States prices are rising at the fastest rate in almost 40 years. While a weeklong closure of the Ambassador Bridge is unlikely on its own to affect car prices for consumers, it has driven up costs for automakers who have had to pay extra to ship goods by plane.

“Our supply chain is quite fragile right now,” Brinley said. “We don’t need another issue in the works.”

— CNN’s Miguel Marquez contributed to this report.

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