SYLVIE DOUGLIS, BYLINE: NPR.
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ADRIAN MA, HOST:
This is THE INDICATOR FROM PLANET MONEY. I'm Adrian Ma.
DARIAN WOODS, HOST:
And I'm Darian Woods. And, Adrian, it is Friday, which - you know what it means.
MA: What else? Indicators of the week.
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WOODS: The week that has been in indicators - so brush the dust off your "Lonely Planet" guide and try to find your long-lost passport, wherever that is, because today's indicators have a bit of an international trade theme. Today, we will cross the Canadian border to hear how a truck convoy is disrupting U.S. carmakers.
MA: We'll also learn about one of the most politicized numbers in America - the large and growing trade deficit. Stay tuned.
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MA: OK, Darian, indicators of the week, international trade edition - go.
WOODS: All right, so at least six car factories in the Great Lakes region have had to stop work this week. Shifts at Ford, Toyota, General Motors and Stellantis - they've all been interrupted right in the middle of this car shortage we're having.
MA: And the usual issue here would be the chip shortage, right?
WOODS: Yeah, and for once, this is not about the chip shortage. This is a moment that you can kind of blame Canada. And I can say that because I'm a Canadian citizen. It is because of these protests against COVID restrictions happening in Canada led by some truckers and others.
MA: Who've dubbed themselves the Freedom Convoy.
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WOODS: Or convoi de la liberte in French.
MA: Wow, I didn't know you spoke French.
WOODS: I can say a couple of words, and I'm working on my accent. Across Canada, protests have sprung up as captured here by Politico.
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UNIDENTIFIED PERSON: I'm staying. I'm not leaving until the mandates are gone.
WOODS: And because a lot of these people are in massive trucks, like semitrucks, they're causing a lot of disruption to life and businesses, especially in the capital of Ottawa and also on the U.S. border.
MA: I'll be honest. Like, I haven't been following this story super closely. I know it has something to do with truckers who are angry about needing vaccines to get across their border.
WOODS: Right, so for, like, everyday people traveling, Canadians have needed to be vaccinated to go into the U.S., and Americans have needed to be vaccinated to go to Canada. Those are the rules. But there's been this exemption for truckers - no vaccine required. But that exemption expired a few weeks ago. And because 1 out of every 10 truckers aren't vaccinated, these 1 out of 10 won't be allowed to cross over the border. Some could even lose their jobs.
So starting late January, people in these semitrucks and other vehicles have started protesting. They've also attracted a bunch of other people along the way, some of whom think that Canada's public health measures to curb COVID-19 have gone too far and others who are just more generally anti-government activists or even conspiracy theorists. Over in the U.S., American politicians like Donald Trump and Ted Cruz have praised the convoys.
MA: OK, yeah, so I've heard of stuff like this happening in other countries, too, yeah?
WOODS: Yeah, like in France right now, Australia and even in my humble home country of New Zealand, this very moment, you can see echoes of the Canadian convoy. A lot of it is about stuff that's going on inside these countries, but you could argue that what's happening in Canada is energizing these movements overseas. Like, I was just watching this livestream of the protests back home in New Zealand on the other side of the world, and I was a little surprised to see somebody waving a Canadian flag.
MA: You know, it's a small world.
WOODS: But maybe the more direct effect that this convoy is having internationally is on trade with the U.S. I want to take you to one bridge connecting Detroit to Windsor, Ontario. It's called Ambassador Bridge. Thanks to a video taken by Zonda Lefebvre (ph), you can hear its ambient sounds right now.
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MA: I know a Canadian traffic jam when I hear one.
WOODS: Yeah. It's got that distinct je ne sais quoi. But this is an important bridge. It's where a quarter of all trade between the U.S. and Canada happens. Visualize the suspension bridge over the Detroit River, with five trucks passing every minute of every hour of the day - like, a lot of trucks, about 8,000 a day.
MA: I can smell the exhaust fumes from here.
WOODS: And that's just on a normal day. But this week with traffic, it's just been down to a trickle. People associated with the Freedom Convoy occupied the bridge. Just imagine semitrucks and also pickup trucks - they blocked this bridge, at times just leaving one lane open, at times fully blocking it. The authorities actually just got permission from the courts to clear the bridge Friday night, but the ongoing protest has forced a lot of people - other truckers, as well - to either stay put or go through a much longer route to go between Canada and the U.S. Some carmakers have even resorted to chartering cargo planes to fly car parts across by air.
And that's why those carmakers have had to halt production. These carmakers rely on parts that would just usually be a quick truck ride away across the river. And this bridge, the Ambassador Bridge, is just so important for U.S. trade. And it's jammed up just at the time when Canada reclaimed the crown from China for the first time since 2014 as America's largest trading partner. So that's my indicator - Canada No. 1.
MA: I feel like I went on a journey.
WOODS: Adrian, hit me with your international trade indicator.
MA: OK, from indicator No. 1, my indicator number is a little bigger. It is $859 billion. That was the size of the trade deficit last year, and that is according to figures released by the government this week. And, you know, that is an all-time record.
WOODS: OK, it sounds like a very large number. But put it into a bit of context for me, Adrian.
MA: The technical term is the goods and services deficit.
WOODS: OK.
MA: And it's what it sounds like. It's the indicator combining the value of all the goods and services the U.S. sells to other countries and all the goods and services it buys from other countries.
WOODS: Right, so you're saying that the U.S. bought $859 billion more than it sold last year?
MA: Exactly. And what have Americans been buying so much of? Well, the report that the Bureau of Economic Analysis put out has all these tables and charts. And if you go, like, 30 pages in, there is a table that shows you what Americans are buying. And what you see is across the board, there are increases in pretty much every category, from food to industrial supplies to consumer goods.
WOODS: I mean, for me, it was a lot of work-from-home equipment - keyboards and stands to make sure I don't get a sore neck.
MA: Yeah. Throw in PlayStations and dresses and all of that stuff. And what this big increase in imports shows is a couple of things, right? It shows, for one thing, that the U.S. economy in 2021 was rebounding from 2020. Like, even when the pandemic was going on, people were buying stuff. And a lot of that stuff came from other countries. And what it also shows is that U.S. industries really relied on imports. Like, just get some of these numbers. Imports of plastics last year increased 50% from the year before.
WOODS: That's a lot of plastic (laughter). And I imagine it was pretty high to begin with.
MA: Totally. And get this - crude oil imports were up 75%.
WOODS: Wow.
MA: And imports for some steel and iron products more than doubled.
WOODS: That's a lot. I mean, this puts the whole supply chain styles into perspective. Like, we had a lot of supply problems, but you also had this flood of people buying stuff.
MA: Exactly. And it's probably important to mention here that it wasn't just the flowing in of stuff to the country that was adding to this trade deficit, right? Another factor was the difficulty of moving stuff out.
WOODS: Yeah, that's right. I remember that INDICATOR episode we actually had last year where there was that farmer who had that really hard time selling his soybeans to Asia...
MA: Yes.
WOODS: ...Because the shipping companies were making so much money importing things, sending those cell phones into the U.S. But they were not going to make as much money taking things like those soybeans and sending them back to Asia.
MA: Yeah, I mean, that's how you end up with a record trade deficit of $859 billion. And just to put that in perspective, the previous record was 763 billion, which was set back in 2006.
WOODS: All right. So Adrian, we've got this huge deficit. Should we be worried? Is this, like, a house of cards kind of thing?
MA: I feel like this is a whole, like, giant container ship full of worms here...
WOODS: Right (laughter).
MA: ...That we are not going to be able to deal with in this episode. But I guess, like, the short conventional wisdom from a lot of economists would be, like, trade deficits - for the U.S., at least - are not inherently good or inherently bad. They are just a product of the U.S. economy. And how it feels just kind of depends on where you sit in it.
WOODS: Very Zen. I like it, Adrian.
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WOODS: That was indicators of the week.
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MA: This episode was produced by Nicky Ouellet and engineered by James Willetts. Corey Bridges checked the facts. Viet Le is our senior producer. Kate Concannon edits the show. And THE INDICATOR is a production of NPR.
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