Respond to class mate’s post with 150 words. A. Briefly describe the effect of the recent blockade on the Ambassador Bridge on both countries.
The 6 day blockade of the Ambassador Bridge cost both the U.S. and Canada millions of dollars, which is not only measured in hard currency, but time and other intangibles.
On the Canadian side, the City of Windsor has estimated that the blockade cost the city itself over $5.6 million. These are the estimated costs of added transit, emergency, public works, policing and various other costs. The city is looking to the Canadian Federal government for relief/reimbursement (Bellacio, 2022).
While the final figures have not been tallied yet, some estimate the economic losses on both sides of the border to reach $1 billion. Further, it is estimated that approximately $6 billion worth of goods did not cross the border during the week of the blockade (La Grassa, 2022). Approximately 40 percent of the goods crossing the Ambassador bridge were auto parts, electrical equipment and machinery (La Grassa, 2022). Estimates on lost wages are approximately $145 million and combined automaker losses are estimated to reach $300 million to both the U.S. and Canadian economies (Meloni, 2022). While these losses can be quantified, certain others are much more difficult, such as lower inventory levels, lost sales due to lack of inventory, higher prices, and subsequent overall inflation (Kiertzner, 2022). Further, this blockade, combined with the COV-ID 19 pandemic has threatened many businesses and livelihoods on both sides of the border.
B. How does this illustrate the difference between domestic and international business.
The U.S. is Canada’s largest trading partner and this trade is vital to Canada’s economy (Griffin & Pustay, 2015). While Canada and the U.S. enjoy stable borders and lucrative free trade agreements, Canada is still a sovereign nation with its own economy, national borders, culture, and political system. For the U.S., these are “uncontrollable” factors which can lead to frustrating results when unforeseen situations such as the Ambassador Bridge incident arise.
The disruption to the supply chain due to this incident has highlighted the difference between domestic and international business. While U.S. companies have “uncontrollable” aspects within their own country, they take on a whole new set of uncontrollable factors when they do business with another.
Many Canadian companies are concerned that their reputation has been hurt, which may lead the U.S. to change its opinion of Canada from a “reliable” trading partner to more of a “risky” one. The fear of Canadian manufacturers is that the U.S. will retrench within its own borders and use U.S. manufacturers for its parts/supplies. (La Grassa, 2022). According to La Grassa (2022), a U.S. Congress member has already pointed to this incident to call for wholly domestic supply chains.
C. Is any business truly domestic anymore?
This is a difficult question to answer. It may be possible for a company to be completely domestic; however, it is unlikely. Companies constantly search for low priced suppliers to provide even the most basic parts/supplies. This is done in order to maintain lower costs and provide lower prices to the end consumer. Generally, these parts tend to come from countries with lower labor costs such as China and Southeast Asia. It is very difficult for me to think of any product/business that is truly domestic anymore. From soup to nuts, whether it be product, packaging, or technology, everything comes from somewhere – and in today’s highly connected world – something along the line comes from somewhere else.
References
Bellacicco, B. (March 15, 2022) Ambassador Bridge protests cost city more than $5.6 million, says City of Windsor Retrieved from: https://windsor.ctvnews.ca/ambassador-bridge-protests-cost-city-more-than-5-6-million-says-city-of-windsor-1.5819705
Griffin, R.W. & Pustay M.W. (2015) International Business: A Managerial Perspective (8th edition) Retrieved from: https://www.myebooksfree.com/pdf/international-business-8th-edition-by-griffin-and-pustay/
Kiertzner, J. (February, 2022) Ambassador Bridge blockage cost could be $1 billion to US, Canadian economy Retrieved from: https://www.wxyz.com/money/auto-news/ambassador-bridge-blockage-cost-could-be-1-billion-to-us-canadian-economy
La Grassa, (February, 2022) Ambassador Bridge blockade stalled billions in trade — and there could be other effects: expert Retrieved from: https://www.cbc.ca/news/canada/windsor/ambassador-bridge-protest-cost-1.6351312
Meloni, R. (February, 2022) Here’s what the closure of the Ambassador Bridge cost automakers Retrieved from: https://www.clickondetroit.com/news/local/2022/02/15/heres-what-the-closure-of-the-ambassador-bridge-cost-automakers/
