Deborah Yedlin, the President and CEO of the Calgary Chamber of Commerce, shares insights on Alberta's crucial energy exports to the U.S. and how the upcoming election might affect this relationship. Phoebe Wall-Howard, a journalist covering the auto industry in Detroit, discusses the election's implications for cross-border trade and the auto sector. They explore the rise of nearshoring, the impact of the Keystone XL pipeline's cancellation, and how U.S. political uncertainties are causing hesitation among businesses, particularly in the automotive industry.
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Quick takeaways
The upcoming US election poses a significant threat to cross-border trade, particularly affecting businesses reliant on US-Canada market ties.
Recent geopolitical shifts have led to increased nearshoring, with Mexican manufacturing becoming more prominent for US companies looking to enhance supply chain reliability.
Deep dives
Impact of the US Election on Cross-Border Trade
The upcoming US election is expected to significantly impact cross-border trade between Canada and the United States. Many businesses and industries are particularly concerned about how the election might affect their operations, especially given that 90% of Alberta's exports go to the US. The potential for new trade barriers or changes in regulations creates uncertainty, compelling companies to adopt a cautious approach. This hesitation is palpable among businesses, as many voice reluctance to discuss the political implications that could alter trade dynamics.
Energy Exports and Environmental Concerns
Energy exports play a crucial role in the economic relationship between Canada and the US, with Canada supplying over half of US energy imports. The significant pipeline networks, such as the Trans Mountain Pipeline, are vital for transporting oil and natural gas across the border. However, environmental concerns have sparked controversies, notably surrounding the Keystone XL pipeline project, which was halted after President Biden's election. The ongoing debates around energy policy highlight how future elections could reshape these energy trade relationships and the direction of sustainable practices.
Nearshoring Trends and Economic Shifts
Recent global events, particularly the pandemic and geopolitical tensions with China, have accelerated the trend of nearshoring, where companies relocate production closer to home. In response, businesses are investing in Mexican manufacturing to circumvent tariffs and improve supply chain reliability. This shift is evident as Mexico has surpassed Canada as the US's largest trading partner, with approximately $800 billion in goods traded annually. Additionally, the focus on local production is not only a matter of cost-efficiency but also a strategic move to enhance economic security within North America.
In the second of a two-part series, we travel to the US-Canada border to find out what people, businesses and industries are thinking ahead of the US election. From one of North America’s busiest border crossings, to Canada’s energy capital, we hear from those who might be impacted by November’s result.
South of the border, in Mexico, we hear how tension with China is benefitting America’s closest neighbours.
Presenter: Sam Gruet
Producer: Megan Lawton
(Photo:: A road sign in Fort Erie, Ontario points in the direction of the Peace Bridge crossing to New York. Credit: Getty Images)
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