Trade Wars and Peace: The US During COVID Part 1

As many know, Mexico and Canada are one of the United State’s greatest trading partners. Canada ranks #1 and Mexico ranks #2, likewise also becoming the top two countries whose trading policies got affected during COVID-19. 

The trade with Canada was disturbed in the effort to make situations better. For example, the United States declared a Defense Production Act, meant to slow the spread of COVID by creating and using more medical facilities in Canada. Even after consuming all the given resources, it was obvious that more was needed. Businesses that did not have medicine in mind were forced to help the cause, resulting in that the amount of goods meant for other businesses dropped significantly, and trade relations stretched as an inadequate amount of goods were produced. 

The necessity for good trading relations between the United States and Canada are due to the billions spent on goods from Canada. Thus, the US’s economy depends greatly on how stable Canada’s economy is. 3.3 million Canadians depend on facilities for jobs. The cut off supply chain with some individual states negatively impacted the trading in those regions. For example, trade with Michigan declined due to decreasing automobile imports and exports, including Texas and Washington.

The desire of stronger and more impactful trade resulted in the formation of USMCA on July 1, 2020. This trade agreement (explained in detail in Article 9) included Mexico, Canada, and the United States. Prior to COVID, the United States traded with Mexico and Canada with a total value of $1.2 trillion. Economic activity operated slower in 2020 because of lockdown policies, correlating to a 13.3% decline in value of trade with Canada and Mexico. The original weight of goods was 579.4 million tons, dropping to 557.7 million tons in 2020. This loss was a major cause of unemployment, impacting millions of lives. 

References:

Wikipedia Contributors. List of the largest trading partners of the United States [Internet]. Wikipedia. Wikimedia Foundation; 2019. Available from: https://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_the_United_States 

Laing EM and K. US, Mexico Fail to Resolve Trade Dispute for Cars [Internet]. Transport Topics. 2021 [cited 2024 May 22]. Available from: https://www.ttnews.com/articles/us-mexico-fail-resolve-trade-dispute-cars 

USMCA - United States-Mexico-Canada Agreement - Details and Commentary [Internet]. USMCA | United States-Mexico-Canada Agreement. 2018. Available from: https://usmca.com/ 

‌The Forecast for US-Mexico Trade: Continued Growth and Development [Internet]. axaxl.com. Available from: https://axaxl.com/fast-fast-forward/articles/the-forecast-for-us_mexico-trade_continued-growth-and-development 

COVID-19 Impact on Canada-US Trade & Relations | The Edge, A Leader’s Magazine [Internet]. 2021. Available from: https://theedgeleaders.com/covid-19-impact-on-canada-us-trade-relations/ 

‌Global Affairs Canada. State of Trade 2020 [Internet]. GAC. 2020. Available from: https://www.international.gc.ca/gac-amc/publications/economist-economiste/state-of-trade-commerce-international-2020.aspx?lang=eng 

Pandemic Alters Profile of U.S.-North America Trade and Border Crossings | Bureau of Transportation Statistics [Internet]. Bts.gov. 2023 [cited 2024 May 22]. Available from: https://www.bts.gov/data-spotlight/pandemic-alters-profile-us-north-america-trade-and-border-crossings#:~:text=The%20value%20of%20U.S.%20freight