Implications of the New Restrictions at the U.S.-Canada Border

As the Coronavirus pandemic, or COVID-19, spreads globally, more and more measures are being put into place to protect people from the condition. This includes the recent announcement that the 5,500-mile United States-Canada border will be closed to “nonessential travel” to hopefully stop the cross-border spread of COVID-19 and protect citizens of both countries. Canadian Prime Minister Justin Trudeau, who is currently self-quarantining with his wife, and U.S. President Donald Trump have both commented that the agreement was mutual.

Trudeau promised to continue ensuring “the smooth flow of goods and essential materials and medication” across the border. Trump briefly announced the decision on Twitter and included bluntly that “trade will not be affected.” In 2019, U.S. trade with Canada totaled more than $600 billion, making Canada one of the U.S.’s biggest trade partners. This includes vehicles, which make up one of the biggest imports and exports between the two countries.  

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The Detroit Free Press reported that “the closure will be limited to discretionary travel and for travel and recreation purposes” and that deliveries of auto parts and assemblies were not expected to be impacted because the two countries recognize that certain supply chains need to continue including “automobile parts and partial assemblies that move back and forth the border several times in the production of some vehicles.

Despite the reassurance that auto supply chains will not be disturbed by the border closure, a real threat still exists for dealerships and employees. With millions of people self-quarantining and not leaving their houses, dealerships are undoubtedly seeing fewer customers and losing business in the service lane. 

Many employees in various industries, including the automobile and health industries, cross the border for work every day, and it is unknown if these people will be affected by the border closure. If these employees are not allowed to cross the border, they will go unpaid and their employer will be under-staffed.

Manufacturers have already announced temporary closures, with Honda reporting it will be suspending production in the U.S. and Canada for six days starting on March 23 because of an “anticipated decline in market demand.” The United Auto Workers union sent a letter to the “big three” U.S. automakers (Ford, General Motors, and Fiat Chrysler) recommending “at least a two-week shutdown of the automotive factories to protect employees who aren’t able to work remotely as well as their families and communities.” According to Canada’s CTV News Channel, production has reportedly been halted and the companies “will monitor the situation weekly to decide if the plants can reopen.”

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Ultimately, Canada and the U.S. are both hoping the border closure does not affect supply chains within the auto industry and that the strong trade relationship between the two countries can continue as they have been in recent years. However, even if the closure does not affect the auto supply chain, there are still a lot of questions regarding employment and business. Expert opinions regarding the longevity of COVID-19 vary greatly, with some saying the pandemic will be gone in as short as a few weeks and others stating it may linger for many more months. 

During Trudeau’s announcement, he stated that the border restrictions “will last in place as long as we feel that they need to last.” Wednesday morning, Trump reported he is hopeful the border closing would last less than 30 days, stating, “I hope that at the end of 30 days we’ll be in good shape.”

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