The Rubber Duck Museum is moving across the border to Canada. It’s currently in Point Roberts, a small U.S. town on a tiny peninsula that is attached to Canada, rather than the mainland United States. The only way to get to the town by road from the rest of the U.S. is to drive through Canada. As NPR explains,
This unique location makes the town of about 1,200 people dependent upon its northern neighbor for nearly everything, including customers looking to add to their rubber duck collections.
Neil and Krystal King are the owners of the rubber duck museum and gift shop. On display, they have ducks from the Soviet era, early Disney toys and a rubber ducky belonging to Sesame Street star Ernie. But a big draw — and what keeps the museum afloat — are the 3,000 ducks for sale….But the ducks are no longer flying off the shelves. Since President Trump launched tariff wars on countries, including Canada and China, and began insisting Canada will be the 51st state, far fewer Canadian visitors have flocked to this U.S. outpost. After months of dismal sales, and now looking at 145% tariffs on goods from China, the Kings say they are packing up the ducks and moving them across the border into Canada….
After Washington imposed 25% tariffs on Canada, Ottawa answered in kind. [Canadian Prime Minister] Trudeau urged Canadians to stay home and spend their money domestically. And that’s just what many have done….In March, the number of cars going through the busy border crossing in Blaine, Wash., was down nearly 28% compared to the previous year. (Canadians make up the largest number of international visitors to the U.S., and last year they generated $20.5 billion in spending.) …
Normally, the small town’s streets are bustling with Canadians who love to cross the border for cheaper food and gas. These days the shops and restaurants are nearly empty….Nearly all the ducks the Kings sell in their gift shop are made in China, so they are subject to the 145% tariffs that President Trump placed on China and went into effect last month….
The Kings said they simply can’t afford to keep the Rubber Duck Museum open in Point Roberts….This summer, they plan to move the museum collection and shop just across the border into Canada and reopen there. They won’t have to pay the 145% tariffs on the ducks from China.
Tariffs have been imposed partly based on the fallacy that jobs left the Rust Belt due to foreign competition. But that’s mostly not true. As Richard Hanania observes, “Free trade didn’t destroy the Rust Belt. It was labor unions” and other anti-business policies in the Rust Belt, which resulted in companies migrating to the American south.
“The Rust Belt’s manufacturing decline isn’t primarily about jobs going to Mexico. It’s about jobs going to Alabama, South Carolina, Georgia and Tennessee,” notes a newspaper article, pointing out that “manufacturing is thriving in the south.”
In the 1950s, there was little foreign competition with American industry, but U.S. companies were already starting to move to the South, to states where unions were less powerful. In 1954, future President John F. Kennedy wrote an article about how manufacturers were leaving New England for the south, leading to 14,000 New England employees losing their jobs at the John Doe Company.
As a newspaper article adds,
In 1970, the Rust Belt was responsible for nearly half of all manufacturing exports while the South produced less than a quarter. Today, the roles are reversed, it is the Rust Belt that hosts less than one-fourth of all manufactured exports and the South that exports twice what the Rust Belt does.
This migration didn’t happen by accident. It was driven by specific policy choices. States such as Tennessee, Alabama, South Carolina and Texas have aggressively courted manufacturers by promising business-friendly policy environments. You can see this on several different fronts.
Economic research suggests that labor conflict drove much of the decline of the Rust Belt. Right-to-work laws in the South, by contrast, created more operational flexibility and attracted capital. The average unionization rate in the Rust Belt is 13.3 percent; in the South, it’s 4.3 percent. Southern states’ political leaders are quite open about how they see right-to-work as foundational to their competitiveness.
But that’s far from the only factor. The South offers cheaper electricity, a critical input for energy-intensive manufacturing. Ten states in the South have industrial electricity rates under 8 cents per kilowatt-hour; zero states in the Rust Belt do….
Right-to-work laws, cheap energy, affordable housing, low-cost land, fast permitting, low taxes. That’s a powerful combination, and it has had big effects. In 1992, there was not a single auto plant in Alabama. Today, Alabama is the No. 1 auto-exporting state, producing more than 1 million vehicles a year. That’s brought more than 50,000 jobs and billions of dollars in investment. Instead of a Big Three, it has a Big Five (Honda, Toyota, Hyundai, Mercedes-Benz and Mazda) along with an ever-expanding web of suppliers. This is just one example of the South’s burgeoning economic prowess.
It would be nice if manufacturing had expanded more in America, but that doesn’t mean America has “de-industrialized.” It hasn’t. American manufacturing output has grown by over 50 percent in real terms since 1991, and America has more auto factories now than it did a decade ago.
