Canada SHUTS DOWN $12.1 Billion U.S. Trading Route with Bold Move!
The Pearl
Apr 24, 2025
53.6K subscribers ... 9,496 views ... 149 likes
Canada SHUTS DOWN $12.1 Billion U.S. Trading Route with Bold Move!
Try thinking of a single road keeping an entire state connected to the rest of its country. Now imagine that road being shut down overnight by a neighbour's shocking decision. Businesses scramble, tourists cancel plans, and the military scrambles to adapt. It is a massive shake-up that could cost billions and create tensions across borders.
But what happens when that lifeline gets cut off? The Alaska Highway is more than just a road; it's a vital connection to the north. So, when Canada makes a move to shut it down, the impact is seismic. Let's break down just how this move could rattle the entire continent.
How this content was made:
Altered or synthetic content
Sound or visuals were significantly edited or digitally generated. Learn more
Transcript
- 0:06
- Intro
- Try thinking of a single road keeping an entire state connected to the rest of its
- country. Now imagine that road being shut down overnight by a neighbour's shocking
- decision. Businesses scramble, tourists cancel plans, and the military scrambles to adapt.
- It is a massive shake-up that could cost billions and create tensions across borders.
- But what happens when that lifeline gets cut off? The Alaska Highway is more than just a road;
- it's a vital connection to the north. So, when Canada makes a move to shut it down,
- the impact is seismic. Let's break down just how this move could rattle the entire continent.
- 1:05
- The Lifeline of the North
- The Lifeline of the North The Alaska Highway is more of a lifeline stretching across some of North America's most rugged and remote terrain. Known as the
- Alaska-Canada Highway, this 1,387-mile stretch of asphalt begins in Dawson Creek, British Columbia,
- winds its way through the wilderness of Canada's Yukon Territory, and finally ends
- in Delta Junction, Alaska. It is the only land route that connects the state of Alaska to the
- continental United States, making it critical for trade, tourism, and military operations.
- It's story begins in the early nineteen forties, with the threat of a Japanese invasion looming
- over Alaska, the American government needed a way to quickly move troops, supplies, and equipment
- to the territory. In 1942, the American Army Corps of Engineers, alongside Canadian teams,
- embarked on one of the most ambitious construction projects of the time. In just eight months, over
- 2:00
- 10,000 American soldiers and thousands of Canadian workers carved a rough path through dense forests,
- across rivers, and over mountains to create what was initially a military supply route. The highway
- was completed in October 1942, and though it was rough and unpaved at first, it served its purpose,
- providing a direct land link to Alaska. After the war, it was opened to civilian use,
- and over the years, it was gradually improved and paved. Today, the Alaska Highway is a fully paved,
- two-lane road that is open year-round, though winter conditions can make travel treacherous with
- snow, ice, and freezing temperatures. The highway passes through some of the most breathtaking
- landscapes in North America, including the peaks of the Canadian Rockies, the boreal forests of
- the Yukon, and the wide-open tundra of Alaska. Along the way, it crosses rivers like the Peace
- 3:06
- and Liard and skirts the edges of wilderness areas like Kluane National Park in Yukon.
- The highway is both a scenic drive and an important piece of infrastructure. For the state
- of Alaska, which is separated from the rest of America by over 500 miles of Canadian territory,
- the highway is the only way to move goods, people, and military equipment by land. While most of
- Alaska's trade comes by sea or air, the highway plays a big role in transporting time-sensitive
- cargo, such as fresh food, construction materials, and heavy machinery that cannot be easily shipped
- by boat or plane. The highway handles a good flow of trucks carrying goods, making it an
- indispensable link in Alaska's supply chain. The highway also serves as an important
- 4:00
- route for tourism. Each year, thousands of travellers drive through the Alaska Highway,
- drawn by the promise of breathtaking scenery and the thrill of the open road.
- Towns along the route have built their economies around this traffic, with hotels, restaurants,
- and gas stations catering to the large stream of visitors. For these communities, the highway
- is their connection to the outside world. The Alaska Highway is an indication of the
- deep ties between Canada and America, forged in a time of war and maintained through years
- of cooperation. However, as we will see, this cooperation also has its tensions,
- and the highway's unique position, crossing through Canadian territory to connect two
- parts of America, makes it a potential flashpoint in times of geopolitical strain.
- Cutting off this vital route would mean more than just disrupting travel—it would
- 5:01
- send shockwaves through the entire economy. The 12.1 billion-dollar trade link that runs
- 5:08
- along the Alaska Highway is an integral lifeline, but how does this colossal
- 5:13
- figure tie into the bigger picture? The 12.1 Billion-Dollar Lifeline
- The Alaska Highway
- 5:19
- The Alaska Highway is an important economic backbone that carries billions of dollars worth
- 5:25
- of goods, supports thousands of jobs, and sustains entire industries. The 12.1-billion-dollar figure
- 5:33
- tied to the highway represents the value of trade that flows through this route each year, making
- 5:40
- it one of the most important land connections in North America. But how did this number come about,
- 5:46
- and what exactly does it encompass? To understand the economic importance of the Alaska Highway, we need to look at the broader context of Alaska's trade with the rest
- 5:58
- of America. Alaska's total trade with the lower 48 states exceeds 40 billion dollars annually.
- 6:06
- Most of this trade moves by sea or air. However, the Alaska Highway plays a big and irreplaceable
- 6:13
- role in this trade network. While ships and planes handle the bulk of Alaska's imports and exports,
- 6:20
- the highway is responsible for moving time-sensitive and high-value goods that
- 6:25
- cannot afford the delays of sea transport or the high costs of air freight. Specifically,
- 6:31
- the highway carries about 12.1 billion dollars worth of goods each year, including fresh produce,
- 6:39
- construction materials, and heavy machinery. For example, Alaska's mining industry, which generates
- 6:47
- over 3 billion dollars annually, relies heavily on the highway to transport equipment like drills,
- 6:54
- steel beams, and spare parts from manufacturers in the lower 48 states. Companies like Kinross Gold,
- 7:03
- which operates the Fort Knox mine near Fairbanks, depend on timely deliveries to keep their
- 7:09
- operations running smoothly. Without the highway, these deliveries would face significant delays or
- 7:16
- much higher costs if shifted to air transport. Tourism is another major contributor to the
- 7:22
- highway's economic value. In 2019, over 60,000 visitors drove the Alaska Highway,
- 7:31
- spending an estimated 150 million dollars in Alaska alone, according to the Alaska Travel
- 7:38
- Industry Association. These tourists are not passing through; they are spending money on
- 7:44
- hotels, restaurants, gas stations, and attractions along the way. For small towns like Tok, Alaska,
- 7:52
- or Destruction Bay in Yukon, this traffic is a lifeline. Closure of the highway would not
- 8:00
- only cut off this revenue stream but could also devastate the local economies that depend on it.
- 8:06
- The energy sector also relies on the Alaska Highway. Alaska's North Slope is one of the
- 8:12
- most productive oil fields in the United States, producing around 500,000 barrels of oil per day.
- 8:20
- While most of this oil is transported via the Trans-Alaska Pipeline to the port of Valdez,
- 8:26
- the highway plays a big role in moving fuel trucks, pipeline maintenance equipment, and other
- 8:32
- supplies. A disruption to this route could cause delays in maintenance and repairs, potentially
- 8:38
- leading to higher energy costs not just in Alaska but across the entire United States.
- 8:45
- But the highway's value goes beyond just trade and tourism. It is also a strategic asset for
- 8:52
- the American military. Alaska is home to several key military installations, including Joint Base
- 9:00
- Elmendorf-Richardson in Anchorage and Eielson Air Force Base near Fairbanks. These bases are
- 9:07
- important to America's defence strategy, particularly in the Arctic, where tensions
- 9:12
- with Russia have been rising in recent years. The highway allows the military to quickly move
- 9:18
- troops, equipment, and supplies to and from Alaska without relying on air or sea routes, which can
- 9:26
- be slower and more vulnerable to disruption. Just to say, the Alaska Highway is worth 12.1
- 9:33
- billion dollars because it is the backbone of Alaska's connection to the rest of the United
- 9:39
- States. It supports trade, tourism, energy, and defence, making it an indispensable part
- 9:46
- of North America's economic and strategic landscape. Any disruption to this route would
- 9:52
- have far-reaching consequences, not just for Alaska but for the entire continent.
- 10:00
- Power and Leverage
- Canada's Control Over the Route: Power and Leverage The Alaska Highway may connect two parts of the United States, but for most of its length,
- it runs through Canadian territory. Specifically, about 1,000 miles of the highway, nearly
- 10:16
- two-thirds of its total length, are located in Canada, passing through the provinces of
- 10:22
- British Columbia and Yukon. This gives Canada significant control over the route, including
- 10:28
- the ability to maintain it, set regulations for its use, and, in theory, restrict access to it.
- 10:36
- The roots of this arrangement go back to the highway's origins. When America built the Alaska Highway in 1942, it did so with Canada's permission,
- 10:47
- as the road had to cross Canadian soil. After the war, America handed over the Canadian portion of
- 10:54
- the highway to the Canadian government, but with the understanding that America would retain the
- 11:00
- right to use it for military and civilian purposes. This agreement was formalised in
- 11:07
- the 1942 Alaska Highway Agreement, signed in Ottawa, which ensured that America had access
- 11:14
- to the highway for trade, tourism, and defence. Despite this agreement, Canada retains sovereignty
- 11:22
- over the land the highway crosses. This means that Canada has the legal authority to impose
- 11:29
- restrictions on the highway if it chooses to do so. For example, Canada could introduce tolls,
- 11:36
- limit the types of vehicles allowed on the road, or even close sections of the highway
- 11:42
- for maintenance or environmental reasons. In extreme cases, Canada could theoretically
- 11:48
- close the highway entirely, though this would be a drastic and bizarre move.
- 11:54
- There have been moments in history when tensions between America and Canada have raised the
- 11:59
- possibility of such restrictions. One notable example occurred in 2018, during a trade dispute
- 12:07
- over United States tariffs on Canadian steel and aluminium. In response to the 25 percent tariffs
- 12:15
- imposed by the Trump administration, some Canadian politicians have suggested retaliatory measures,
- 12:22
- including imposing tolls on American trucks using the Alaska Highway. British Columbia
- 12:28
- Premier John Horgan was among those who floated this idea, though it never came to fruition.
- 12:35
- Nevertheless, it highlighted the fact that Canada has the power to use the highway as
- 12:41
- leverage in trade negotiations or other disputes. Another factor that gives Canada leverage is the
- 12:49
- environmental sensitivity of the regions the highway passes through. The Alaska Highway cuts
- 12:55
- through some of Canada's wilderness areas, including Kluane National Park in Yukon,
- 13:00
- which is home to bears, caribou, and other wildlife. Environmental groups have long advocated
- 13:08
- for reducing truck traffic on the highway to minimise its impact on these ecosystems. While
- 13:14
- Canada has not yet imposed significant restrictions for environmental reasons, it could use this as a justification to limit access to the highway in the future.
- 13:24
- Canada could also cite national security as a reason to restrict access to the highway.
- 13:31
- For example, if there were a perceived threat from America. Or another country,
- 13:36
- Canada, could close the highway to protect its sovereignty. While this scenario is unlikely,
- 13:43
- it shows the fact that Canada holds the ultimate authority over the route.
- 13:49
- Canada's control over the Alaska Highway gives it significant power and leverage in its relationship
- 13:56
- with America. While the two countries have historically cooperated to keep the highway open,
- 14:02
- the potential for Canada to use this control as a bargaining chip in trade, environmental, or
- 14:08
- security disputes is always present. This dynamic adds several complexities to the America-Canada
- 14:16
- relationship, particularly when tensions rise over issues like trade tariffs or territorial disputes.
- Triggers
- 14:26
- What Could Push Canada to Act? While the idea of Canada shutting down the Alaska Highway may seem far-fetched, several real-world issues could push Canada to
- 14:37
- take such a drastic step. These issues range from trade disputes to environmental concerns, and they
- 14:44
- highlight the delicate balance of power between America and Canada when it comes to the highway.
- 14:50
- One of the most likely triggers for Canada to restrict access to the highway is a trade dispute. America and Canada have a long history of trade disagreements. For example,
- 15:03
- the Trump administration imposed tariffs of up to 25 percent on Canadian steel and aluminium, citing
- 15:10
- national security concerns. In response, Canada retaliated with its tariffs on American goods,
- 15:17
- and tensions escalated. During this period, some Canadian politicians, including British Columbia
- 15:24
- Premier John Horgan, suggested imposing tolls on American trucks using the Alaska Highway as
- 15:31
- a form of retaliation. While this idea was never implemented, it showed that Canada could use the
- 15:37
- highway as leverage in trade negotiations. Also, there is a dispute over sovereignty,
- 15:44
- particularly in the Arctic. Canada and America have long disagreed over the status of the
- 15:50
- Northwest Passage, a sea route through the Arctic that Canada claims as its internal
- 15:56
- waters but America views as international waters. In 2021, American Navy ships sailed
- 16:03
- through the passage without seeking Canada's permission, creating outrage in Ottawa. The
- 16:09
- Canadian prime minister condemned the move, and tensions grew. If such disputes were to escalate,
- 16:16
- Canada could use the Alaska Highway as bargaining power, threatening to close it unless America
- 16:21
- respects Canada's territorial claims. Environmental concerns could also push
- 16:27
- Canada to act. The Alaska Highway passes through some of the most ecologically sensitive areas in
- 16:34
- North America. Environmental groups have long advocated for reducing truck traffic
- 16:39
- on the highway to protect these ecosystems. In 2022, Canada passed the Impact Assessment Act,
- 16:48
- which gives the government greater authority to regulate projects that could harm the environment. If environmental pressure mounts, Canada could impose restrictions on the highway,
- 16:59
- such as limiting the number of trucks allowed or requiring stricter emissions standards. While a
- 17:05
- full closure might be extreme, it is not out of the question if Canada decides to prioritise
- 17:11
- environmental protection over economic concerns. Domestic politics could play a role. In times of
- 17:19
- strained relations between America and Canada, Canadian leaders might see a brave move like
- 17:25
- closing the highway as a way to rally public support. For example, during the
- 17:31
- Trump administration, when American-Canadian relations were tense, Canadian politicians
- 17:36
- often used anti-American rhetoric to boost their popularity. A dramatic gesture like closing the
- 17:43
- Alaska Highway could be seen as a way to stand up to America and assert Canadian sovereignty,
- 17:50
- even if it came with significant economic costs. In the end, the key factor is leverage.
- 17:57
- Canada knows that America depends on the Alaska Highway for trade, tourism, and military access,
- 18:04
- and it could use this dependence to gain concessions in other areas. While closing the
- 18:10
- highway would be a nuclear option, one that would likely hurt Canada as much as America, it remains
- 18:17
- a powerful tool in Canada's geopolitical arsenal. The Fallout
- The Fallout
- 18:24
- If Canada were to close the highway, the impact on America would be immediate and
- 18:29
- severe. The highway is an important lifeline for trade, tourism, and military operations,
- 18:37
- and its closure would disrupt all of these sectors in ways that would be difficult to mitigate.
- 18:43
- Trade would take a massive hit. As we discussed earlier, the Alaska Highway carries approximately
- 18:51
- 12.1 billion dollars worth of goods each year. If the highway were closed, these goods would need
- 18:58
- to be rerouted via air or sea, both of which are more expensive and less efficient. For example,
- 19:05
- air freight costs around 5 dollars per pound, compared to just 0.50 dollars per pound for
- 19:11
- truck transport. This means that shipping a ten-thousand-pound piece of mining equipment
- 19:16
- by air would cost fifty thousand dollars, compared to five thousand dollars by truck. For industries
- 19:24
- like mining, which rely on heavy machinery, this cost increase would be devastating. Moreover,
- 19:31
- Alaska's airports are already operating at capacity, handling 2.5 million tons
- 19:36
- of cargo annually. They simply do not have the infrastructure to handle a sudden surge in demand,
- 19:43
- meaning that many shipments would be delayed or cancelled altogether. Tourism would also suffer. Every year, over sixty thousand visitors drive the Alaska Highway,
- 19:54
- contributing one hundred and fifty million dollars to Alaska's economy. Towns like Tok,
- 20:00
- Alaska, and Haines Junction in Yukon rely heavily on them, and the closure of the
- 20:06
- highway would completely cut off this revenue. Hotels would sit empty, restaurants would close,
- 20:14
- and local businesses would struggle to survive. The Alaska Tourism Board estimates
- 20:20
- that a prolonged closure could cost the state hundreds of millions of dollars in lost revenue,
- 20:25
- and the effects would be felt for years to come. The military would also face significant
- 20:32
- challenges. Alaska is home to several key military bases. These bases are important to America's
- 20:39
- defence strategy. The highway allows the military to quickly move troops, equipment, and supplies
- 20:46
- to and from Alaska without relying on air or sea routes, which can be slower and more vulnerable
- 20:53
- to disruption. A few years back, the American Army moved over one thousand tons of gear via the
- 21:01
- highway. If the highway were closed, the military would be forced to rely on airlifts, which are far
- 21:08
- more expensive. For example, a C-17 Globemaster Three cargo plane costs twenty thousand dollars
- 21:16
- per hour to operate. A month-long closure could easily cost the military an additional
- 21:22
- fifty million dollars in transportation costs, not to mention the strategic risks of having slower
- 21:28
- access to Alaska in the event of a crisis. The energy sector would be hit hard.
- 21:35
- The Alaska Highway is used to transport fuel trucks, pipeline maintenance equipment,
- 21:41
- and other supplies essential to the state's oil and gas industry. Alaska's North Slope produces
- 21:49
- around five hundred thousand barrels of oil per day, and while most of this oil is shipped via
- 21:54
- the Trans-Alaska Pipeline, the highway plays a key role in keeping the pipeline operational.
- 22:00
- A closure could delay maintenance and repairs, leading to potential shutdowns or reduced
- 22:06
- output. This, in turn, could cause gas prices to rise across America, as Alaska's oil is a key
- 22:15
- part of the nation's energy supply. Even a small disruption in supply could lead to price increases
- 22:22
- of twenty cents per gallon or more at the pump. The closure of the Alaska Highway would be a
- 22:28
- logistical nightmare for America, with bigger consequences for trade, tourism, defence,
- 22:34
- and energy. While America could eventually find workarounds, the short-term costs would
- 22:41
- be staggering, and the long-term damage to Alaska's economy could take years to repair.
- 22:47
- But what happens when diplomacy fails? With the Alaska Highway now out of commission,
- 22:53
- the U.S. would have no choice but to escalate. From invoking long-standing agreements to
- 22:59
- economic pressure, America has plenty of leverage. Would they resort to harsher
- 23:05
- tactics? Let's dive into the potential fallout from this unprecedented move.
- Fighting Back
- 23:12
- Fighting Back: What Could America Do? If Canada were to close the Alaska Highway,
- 23:18
- America would not sit idly by. While the immediate impact would be severe, America has
- 23:26
- several tools at its disposal to respond, ranging from diplomatic pressure to economic retaliation.
- 23:34
- America would almost certainly turn to diplomacy. The State Department would immediately engage
- 23:40
- with Canada's Foreign Minister to negotiate a resolution. America could point to the 1942
- 23:46
- Alaska Highway Agreement, which guarantees its access to the highway, as well as the
- 23:52
- 1989 America-Canada Free Trade Agreement, which includes provisions for protecting transportation
- 23:59
- routes. Article 904 of that agreement, for example, ensures that both countries maintain
- 24:06
- open access to key infrastructure. However, if Canada were determined to keep the highway closed,
- 24:13
- diplomacy might not be enough, and America would need to consider stronger measures.
- 24:19
- Economic retaliation is another tool. America could impose tariffs on Canadian goods, targeting
- 24:26
- industries that are particularly important to Canada's economy. If the highway were closed,
- 24:32
- America could escalate this approach, targeting key exports from British Columbia and Yukon,
- 24:39
- such as lumber, coal, and gold. British Columbia alone exports 4 billion dollars worth of lumber
- 24:47
- to America each year, and Yukon's gold mining industry is a major economic driver.
- 24:54
- By hitting these industries with tariffs, America could pressure Canada to reopen the highway.
- 25:01
- Given that 75 percent of Canada's exports go to America. Canada has more to lose in a trade war.
- 25:09
- Another option is to find alternative logistics solutions. While the Alaska Highway is the only
- 25:14
- land route to Alaska, America could increase its reliance on sea and air routes to keep
- 25:21
- goods flowing. For example, the Port of Seattle could ramp up its shipping capacity,
- 25:27
- sending an additional 50 container ships per month to Anchorage. While this would be slower,
- 25:33
- taking five days by sea compared to two days by road, it would help mitigate the impact
- 25:39
- of the closure. Similarly, America could use airlifts to transport urgent cargo,
- 25:46
- though this would be expensive. Boeing Field in Washington, for instance, could serve as
- 25:52
- a staging ground for cargo flights to Alaska, but the costs would be significant, potentially
- 25:58
- doubling the price of transporting goods. America could also take legal action
- 26:03
- through international bodies like the World Trade Organisation. Under the 1994 General
- 26:10
- Agreement on Tariffs and Trade, America could argue that Canada's closure of the
- 26:15
- highway violates international trade rules. However, WTO cases can take years to resolve,
- 26:23
- as seen in the 2004 America-Canada wheat dispute, which dragged on for nearly a decade. While this
- 26:31
- might provide long-term relief, it would do little to address the immediate crisis.
- 26:36
- There is the question of whether America could build an alternative route. Some have suggested constructing a new highway through Alaska's interior, perhaps via Juneau,
- 26:47
- to bypass Canada entirely. However, this is not a viable short-term solution. Building
- 26:55
- such a road would take at least 10 years and cost upwards of 10 billion dollars due to poor terrain,
- 27:02
- including mountains, glaciers, and permafrost. Moreover, any new route would still need to
- 27:09
- cross Canadian territory in some areas, making it a politically and logistically complex endeavour.
- 27:16
- While America has several options for responding to a closure of the Alaska Highway, none of
- 27:22
- them are perfect. Diplomacy might not work, economic retaliation could escalate tensions,
- 27:29
- and logistical workarounds would be costly and inefficient. The best solution, of course,
- 27:36
- would be to avoid such a scenario altogether through continued cooperation and mutual
- 27:42
- respect between the two nations. Alaska's Hidden Vulnerability
- Alaskas Hidden Vulnerability
- 27:49
- While much of the focus on the Alaska Highway centres on trade and military access, there is a hidden vulnerability that could make a closure even more devastating:
- 28:00
- Alaska's food supply. Alaska is unique among American states in that it imports 95 percent of
- 28:08
- its food. Unlike other states, which can rely on local agriculture or nearby farms,
- 28:14
- Alaska's harsh climate and remote location make it heavily dependent on outside sources
- 28:19
- for everything from fresh produce to canned goods. Most of this food arrives by ship.
- 28:26
- However, the Alaska Highway plays a big role in delivering time-sensitive items, such as milk,
- 28:33
- eggs, and fresh vegetables, which need to be transported quickly to avoid spoilage.
- 28:40
- Each week, trucks on the highway carry fresh food into the state. If the highway were closed, this
- 28:46
- supply chain would be severed, and Alaska would be forced to rely entirely on air and sea routes.
- 28:52
- While ships could theoretically pick up the slack, they are much slower, taking up to 10 days longer to deliver goods compared to the two-day trip by truck. This
- 29:03
- delay would be disastrous for perishable items. Air transport is another option, but it is
- 29:09
- expensive and challenging. Ted Stevens Anchorage International Airport is one of the busiest
- 29:16
- cargo airports in the world, but it is already operating at capacity, handling 2.5 million tons
- 29:24
- of cargo annually. There is simply no room to suddenly triple or quadruple the number of food
- 29:31
- flights needed to replace the highway's capacity. Moreover, air freight is five times more expensive
- 29:39
- than truck transport, which would drive up food prices for Alaskan consumers, many of whom already
- 29:46
- pay more for groceries than the national average. The vulnerability of Alaska's food supply was laid
- 29:52
- bare in 2020 when a labour strike at the Port of Anchorage caused a brief disruption in shipments.
- 29:59
- Within 48 hours, grocery store shelves in Anchorage and Fairbanks were empty,
- 30:05
- and panic buying ensued. If the Alaska Highway were closed for an extended period,
- 30:11
- the situation would be far worse. Stores that stock only three days' worth of fresh food would
- 30:18
- run out almost immediately, and it could take weeks for alternative supply chains to catch up.
- 30:25
- This hidden vulnerability makes the Alaska Highway even more critical than previously thought. While
- 30:32
- trade and tourism are important, the ability to feed Alaska's population is a matter of basic
- 30:37
- survival. By controlling access to the highway, Canada holds significant leverage over America.
- 30:45
- In a worst-case scenario, Canada could use this leverage to exert pressure on
- 30:50
- America without firing a single shot, simply by threatening to cut off Alaska's food supply.
- 30:58
- With food supply and trade now at the heart of this geopolitical struggle, the stakes couldn't be higher. The ripple effects from cutting off the Alaska Highway
- 31:08
- would stretch far beyond the local impact. Could the closure spark a broader economic crisis?
- The Bigger Picture
- 31:16
- The Bigger Picture A closure of the Alaska Highway would not just affect Alaska and Canada; it would have major effects across North America
- 31:28
- and potentially the world. The interconnected nature of trade, defence, and politics means
- 31:35
- that such a move would go far beyond the immediate region. The economic impact would be felt across
- 31:42
- the entire America-Canada trade relationship. The two countries are each other's largest
- 31:49
- trading partners. A closure of the Alaska Highway could disrupt this trade, leading to a potential
- 31:57
- drop in overall trade volume. While the highway itself only carries a fraction of this trade, the
- 32:04
- symbolic and logistical impact of such a closure could lead to broader disruptions, as businesses
- and governments on both sides scramble to adjust. Canada would also feel the pain. The two provinces
- through which the highway passes rely on trade with America for their economic stability.
- British Columbia, for example, exports 4 billion dollars worth of lumber to America yearly,
- while Yukon's mining industry, particularly gold, is heavily dependent on America's markets.
- If America retaliated with tariffs or other economic measures, these industries could suffer
- significant losses. Moreover, Canada's reputation as a reliable trading partner could be damaged,
- leading to long-term consequences for its economy. Closure of the highway could also strain the
- 33:01
- The Consequences
- America-Canada relationship, particularly in the realm of defence. The two countries are close
- allies, bound by treaties like the North American Aerospace Defence Command, which has been in place
- since 1958. NORAD relies on seamless cooperation between the American and Canadian militaries to
- defend North America from aerial threats. Closure of the Alaska Highway could delay joint military
- exercises or the movement of personnel and equipment, weakening the continent's defence
- posture. This would be particularly concerning in the Arctic, where Russia has been expanding its
- military presence in recent years. With Alaska just 55 miles from Russian territory across the
- Bering Strait, any disruption to American military access could embolden adversaries.
- The closure could also set a dangerous precedent for other countries. For example,
- 34:03
- Mexico, which has trade disputes with America, could take inspiration from Canada's actions.
- In 2021, Mexico threatened to impose fees on American trucks crossing the border in response
- to disputes over trucking regulations. If Canada successfully uses the Alaska Highway as leverage,
- Mexico might be tempted to close key border crossings. This could lead to a cascade of
- trade disruptions across North America, with devastating economic consequences.
- On the other hand, a crisis like this could spur innovation and long-term solutions. For example,
- Alaska has long considered building a rail link from Fairbanks to Canada. The rail line could
- provide a more reliable and efficient way to move goods to and from Alaska,
- reducing dependence on the highway. Additionally, advancements in drone technology could offer new
- 35:03
- ways to deliver food and other essentials to remote Alaskan communities, though this is
- still years away from being a reasonable solution. While the closure of the Alaska Highway would be
- painful in the short term, it could also force both countries to rethink their infrastructure
- and trade strategies. However, the immediate economic and political costs would be enormous,
- making it a scenario that both nations would likely work hard to avoid. This bold move could change North America forever—trade, trust, and all. Want more
- shocking twists like this? Stick around for other border shake-ups. Thanks for watching.
| |