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A drone view shows CN MacMillan Yard in Vaughan, near Toronto, after Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) locked out workers following unsuccessful negotiation attempts with a major labor union, in Vaughan, Ontario, Canada August 22, 2024.
Rail worker lockout could cost billions
Canadian National Railway and Canadian Pacific Kansas City have locked out more than 9,000 of their workers as prolonged contract talks broke down.
Workers are pushing for a pay increase and better working conditions. As the lockout is set to disrupt transit within Canada and shipping between the country and the US, the companies are pushing for binding arbitration.
At roughly CA$341 million a day, the cost of the lockout will add up quickly. Several industries will be affected, including commuter rail – over 30,000 commuters in Toronto, Vancouver, and Montreal – along with chlorinated drinking water, fertilizer, grain, jet fuel, coal, potash, vehicles, and all kinds of manufactured goods.
The lockout will hit US-Canada trade hard, affecting supply chains and the availability – and possibly the price – of goods on both sides of the border, including food. Prior to the lockout, the rail companies had halted shipments cross-border, putting 2,500 cross-border rail cars into disuse and stranding the goods they’d otherwise carry.
What can the feds do? “Trudeau is between a rock and a hard place,” says Graeme Thompson, a senior analyst with Eurasia Group. “The Liberals don’t want to be seen as interfering in collective bargaining, especially given their support in parliament from the traditionally pro-union New Democratic Party.”
“But on the other hand, the economic consequences of even a short work stoppage for Canada would be severe,” he adds, “and the last thing Trudeau needs is more bad economic news with his party trailing the opposition Conservatives in the polls, largely due to poor perceptions of their handling of the economy.”
By late Thursday, Trudeau's government announced it had asked the country's industrial relations board to issue a back-to-work order, which is expected within a few days. So we'll be watching to see how quickly action is taken, and how quickly the rail workers get back on the job.
Railway cars crowd the CN Rail freight depot in Hamilton, Ontario, Canada on Aug. 19, 2024.
Blame Canada! Rail strike impact will ripple across North America
Canada’s two largest rail companies have halted rail shipments after failing to reach an agreement with the union representing their employees.
Canadian Pacific Kansas City and Canadian Railway had until midnight last night to find common ground on a new labor contract with Teamsters Canada, which is seeking better safety guarantees for its members. Both of Canada's major railways locked out 9,300 workers after they failed to agree on a new contract.
The two companies have a virtual monopoly over Canada’s rail network, which moves goods worth $280 billion annually. Fertilizers, grains, and coal are particularly vulnerable to the rail stoppage. Canada’s fertilizer industry alone, for example, stands to lose $50 million a day amid the strike.
Impact on the US. Truckers carry most goods across the border, and they’ve already jacked up fees ahead of increased demand. But rail carries about $100 billion annually between the two countries. US rail giant Union Pacific warned that a Canadian strike would be “devastating.” The auto industry is particularly worried: Canadian trains move components for at least a dozen US plants and 90% of those in Mexico.
What happens next? The minority Liberal government of PM Justin Trudeau has so far been reluctant to force the sides into an agreement or to require the Teamsters to go back to work. In part, that reflects pressure from his left-wing coalition partners, the New Democratic Party. But now that the rails are idle, he may come under more pressure to act.
- Second annual US-Canada Summit focuses on security and trade ›
- Political fortunes, job futures, and billions hang in the balance amid labor unrest ›
- Hard Numbers: Mpox hits the 6ix, Canadian rail strike looms, sexual assaults in the US military go undercounted, J&J looks to close out talcum powder suit, the problem with city birds ›
Climate change is "wreaking havoc" on supply chains
Climate change is disrupting industries around the world, and that has a major impact on global trade. On GZERO World with Ian Bremmer, WTO Director-General Ngozi Okonjo-Iweala lays out the case for diversifying and decentralizing production around the world to build resiliency and reduce risk in global supply chains.
“Climate change is wreaking havoc in so many places,” Okonjo-Iweala says, “If you concentrate your production in any one place, you risk really disrupting things.
The WTO Chief argues that by trading some of the “just-in-time” efficiency of global supply chains for resiliency, we can reduce the risk of climate disruption as well as the geopolitical risk of labor being contracted in a single country, like China.
“You see what is happening all over the world?" Okonjo-Iweala asks. "We do need to diversify if we want to build resilience.”
Watch the full interview: World trade at risk without globalization, warns WTO chief Ngozi Okonjo-Iweala
Catch GZERO World with Ian Bremmer every week at gzeromedia.com/gzeroworld or on US public television. Check local listings.
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- The Graphic Truth: The great supply chain squeeze ›
- Want to fix climate change? This is what it’ll take. ›
- What Africa has to say about climate change ›
- The Graphic Truth: Has climate change hurt or helped farmers? ›
- Ian Explains: Can we save the planet without hurting the economy? - GZERO Media ›
- "Climate is a problem, not the end of the world" - Danish author Bjorn Lomborg - GZERO Media ›
- Can the world run on green energy yet? Author Bjorn Lomborg argues that's very far off - GZERO Media ›
World trade at risk without globalization, warns WTO chief Ngozi Okonjo-Iweala
On GZERO World, Ian Bremmer sits down with WTO Director-General Ngozi Okonjo-Iweala to talk about world trade, the complicated business of moving goods and services across borders around the world.
Global trade hit a staggering $32 trillion in 2022 and the World Trade Organization oversees 98% of it. It’s an international institution that doesn’t normally make headlines, but has a massive role in almost every aspect of your daily life—from the food you eat, to the clothes you wear, to the cars you drive, to the phone you’re probably using to watch this video.
The WTO is the referee of global trade, a place for countries to negotiate agreements and resolve disputes. But it’s also received criticism for being too slow to adapt to the modern economy and for favoring wealthy nations over countries in the Global South.
Okonjo-Iweala has been pushing members to recommit to the principles of globalization and invest in developing economies.
“It's not right that 10 countries export 80% of the vaccines in the world,” Okonjo-Iweala says, “It's too concentrated.”
She argues that by decentralizing and diversifying global supply chains, we can make the global economy more resilient, reduce monopolies, and bring countries left on the margins of world trade into the mainstream.
Watch GZERO World with Ian Bremmer every week at gzeromedia.com/gzeroworld and on US public television. Check local listings.
- Episode 4: Broken (supply) chains ›
- US-China communications brighten over trade ›
- Climate change trade wars ›
- Hard Numbers: German far right comes up short, Ukraine dreams of drones, a space rock arrives on earth, world trade slows ›
- Women in power — the World Trade Organization's Ngozi Okonjo-Iweala ›
- What Africa has to say about climate change ›
- The Graphic Truth: Has climate change hurt or helped farmers? ›
- Crisis at the WTO: Fixing a broken dispute system - GZERO Media ›
Podcast: Calling for the "reglobalization" of trade: WTO chief Ngozi Okonjo-Iweala
Listen: Ian Bremmer sits down with World Trade Organization Director General Ngozi Okonjo-Iweala, the first woman and first person from Africa to lead the organization, for a conversation about the good, the bad, and the future of global trade on the GZERO World podcast.
In the last half century, globalization has dramatically increased economic output, created hundreds of millions of jobs, and lifted millions of people out of poverty. But development between countries has been uneven, and global inequality is on the rise. Covid-19 and the war in Ukraine disrupted exposed weaknesses in the supply chain. And rising tension between the US and China has led to a world economy that’s becoming increasingly fractured.
But is the way out of a crisis not less trade, but more? How do we make sure the future of trade is fair to countries in the Global South, who are reeling from runaway debt and bearing the brunt of climate change?
Subscribe to the GZERO World Podcast on Apple Podcasts, Spotify, Stitcher, or your preferred podcast platform, to receive new episodes as soon as they're published.
Ian Explains: What is the World Trade Organization?
You probably don’t spend a ton of time thinking about the World Trade Organization (WTO), but it has a huge role in almost every aspect of your daily life—from your morning Brazil-roasted coffee to the Chinese-made smartphone you’re probably using to watch this video.
The WTO is an international organization that deals with the complicated business of moving goods and services across borders. It’s kind of like the referee for global trade, setting the rules and providing a forum for countries to negotiate agreements and resolve disputes. It’s why you can buy avocados from Mexico, clothes from Vietnam, or cars from Korea in the United States without a second thought.
Global trade ballooned to a staggering $32 trillion in 2022 and the WTO oversees 98% of it.
The WTO has been a force for globalization. It’s opened up new markets, lowered tariffs, and lifted millions out of poverty, but it’s also received criticism for favoring wealthy nations and exacerbating global inequality. Not to mention a broken dispute settlement system that’s made resolving international trade conflict virtually impossible.
On Ian Explains, Ian Bremmer dives into the history of the WTO, why the US is blocking appointments of WTO judges, and what all of this has to do with Japanese octopus.
Watch the full interview: World trade at risk without globalization, warns WTO chief Ngozi Okonjo-Iweala
Watch the upcoming episode of GZERO World with Ian Bremmer on US public television this weekend (check local listing) and at gzeromedia.com/gzeroworld.
- World Trade Organization - GZERO Media ›
- Women in power — the World Trade Organization's Ngozi Okonjo-Iweala ›
- Hard Numbers: GDP wars, WTO rules in Beijing’s favor, Africans support Chinese engagement, China winning 5G battle ›
- The Graphic Truth: Russia vs. US trade ties in Africa ›
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- Crisis at the WTO: Fixing a broken dispute system - GZERO Media ›
COVID protests spread in China
Ian Bremmer's Quick Take: My goodness, speaking of kicking off your week, all across China, demonstrations of the sort that we have certainly not seen under Xi Jinping rule about COVID, about zero COVID, and the loss of liberties that Chinese citizens have faced, but also increasingly moving towards demands for free speech and open media, and even Xi Jinping's removal, certainly unprecedented in this country in the last decade. Xi now, of course, on his third term, having removed term limits, consolidated extraordinary power, but some people really aren't happy about it.
What's going on here? Well, first of all, the proximate cause, the spark that set this all off was an apartment building fire in Xinjiang, where the firefighters were not able to adequately respond because of COVID quarantine measures. So, they couldn't get hoses to actually fight the fire because they weren't allowed in, they didn't have the keys, it was locked down. And as a consequence, a lot of Chinese citizens died. That led to demonstrations all over the country, ostensibly in solidarity with this incredibly poor mistake on the part of local Chinese leaders in Xinjiang, but also really increasingly frustrated with the fact that zero COVID in China has been an incredible disruption to daily life for hundreds of millions of Chinese.
You get one case and suddenly you can lock down your entire apartment block. You were in contact with somebody who was in contact with someone that was positive and so much for your ability to get into a workplace or a restaurant. And these apps which monitor your every move, and unless you're green, you are not going anywhere as a Chinese citizen. And they're testing you across the country every two days. And they're watching while the rest of the world and the World Cup, for example, is all out and they're celebrating and they're in post-COVID life. And that's not the case in China at all.
Very interesting to see that the classes of people that are angry here are across the map. You've got students in universities across the country. You've got workers in factories that have been locked down, that are stuck in the dormitories or stuck in their places of work for weeks on end. You've got members of the middle-class in shopping malls in higher end locations. The urban intelligentsia in Shanghai, which led to some of the first significant outcry after their quarantines and lockdowns were fairly badly handled. And of course, as the wealthiest city in China, very educated city in China, the feeling was, well, how can our government get this wrong? We're the ones that are supposed to do everything right. Well, not at all.
Now, it's important to recognize that we're not talking about scenes that are violent. There have been a number of arrests, but nothing like significant repression on the part of the Chinese police forces or army so far, which means that the Chinese government is allowing this to play out at least over the course of the weekend. And I do expect that some of the response from the Chinese government will be an admission that zero COVID measures have not been effectively rolled out across the entire country that have not been equivalently rolled out across the entire country. By the way, that is true. And a number of local and regional officials will be forced to fall on their sword will be removed, some will be arrested, corruption, incompetence, I mean, we've certainly seen that movie before in China. And there's a lot that Xi Jinping can do in response to that as well as cracking down to a harder degree at the same time that would take a lot of these people off the streets.
So this is not a threat to Xi Jinping's regime or his rule. And if we look back to 1989, in the months leading up to the Tiananmen Square massacre, demonstrations and massacre, you would've seen millions of people demonstrating across the country in cities everywhere. That is nothing remotely like what we're seeing right now.
But the key point here is that Xi Jinping's ability to respond to changing zero COVID is limited. There are record numbers of cases in China, nothing like what we see in the United States, but far greater than China has seen since the beginning of COVID outbreaks a couple of years ago. And a lot of Chinese are not vaccinated, and those that are, most of them were vaccinated a couple of years ago. Particularly when we look at older populations that are very vulnerable. China's own vaccines have been very limited in efficacy, less so than mRNA vaccines in the West. They're not willing to approve mRNA vaccines from the West. And while they have gone faster with approvals for therapeutics in response to COVID, they still don't have distribution taken care of on the ground in China. And so they don't have the widespread therapeutics that exist in the West either. So they're still at a minimum months away from meaningful reductions and relaxations of zero COVID policy in China. And that means that Xi Jinping's ability to truly address the anger that we're seeing on the streets is going to be mostly about stick, it's not about carrot.
Now, of course, with the surveillance state that China presently runs, they have the capacity to do that in a way that really no other state at scale can. But that does imply more violence. It does imply more repression. It also implies, and this is critical, longer reduced economic growth, bigger disruptions in supply chain. It's very interesting right now, I saw oil prices are basically trading at the top of their pre-Russian invasion range. Why? Because of expectations that zero COVID is going to be a bigger economic problem for longer. I think that's absolutely right, that the Chinese are going to have to deal with lower quality and lower realities of growth through 2023 at an absolute minimum.
Another thing I'd mention is that during Xi Jinping's private bilaterals at the G-20 in Bali, just a week and a half ago, he wasn't bringing up zero COVID at all. It didn't show up in those conversations unless he was proactively asked about it. In part, maybe because at the time he didn't think it was a crisis, certainly wasn't planning on making any significant announcements anytime soon. I think that's where we are right now.
So they're stuck, they're in a corner. This isn't major instability, but it's absolutely bearing watching out and certainly will have a major impact on the global economy in 2023. That's it for me. Hope everyone's well, and I'll talk to y'all real soon.
Chinese workers load a van with parcels, most of which are from online shopping, at a distribution center in Shanghai.
Hard Numbers: Global packaging boom, livestreamed peaches, the art of 1s and 0s, e-commerce’s share of the pie
63.6: All those e-commerce goods have to be shipped in something, right? The global market for envelopes, tubes, mailers, and other protective packaging is projected to hit $63.6 billion this year, nearly double where it stood in 2019.
70: A peach farmer in Beijing’s farm-rich Pinggu district was able to sell 70kg (155 pounds) of the fruits every day during this year’s harvest season, thanks to livestreaming her work and selling online. Back in 2017, the local government launched a massive initiative to bring local farmers onto e-commerce platforms.
20: Online sales in 2021 accounted for 20% of the global $65 billion art market. That’s twice the share of 2019, before the pandemic gave a boost to e-commerce in art.
14.5: E-commerce accounted for 14.5% of all retail sales in the US in the second quarter of this year, according to the US Fed. That’s up 3 points since the eve of the pandemic and is a full 10 times higher than it was two decades ago.