New trade war reaches the rails of America

Trump’s new tariffs reach railway trade between US, Canada and Mexico, putting billions of dollars and thousands of jobs at risk

While President Donald Trump prepares the next phase of the US trade war with fees about Mexico and Canada defined for next Tuesday, as well as additional China and the European Union, US cargo railroads are preparing for an impact that will reach the heart of a vast traffic network that connects global economies.

In 2024, US railroads moved about US $ 203.1 billion in international trade with Canada and Mexico according to a new report by the American Railway Association (AAR). The division between countries is almost equal, according to data from Bureau of Transportation Statistics: US $ 104.8 billion in USA-CANADA TRADE (66% imports, 34% exports) and US $ 98.3 billion in US-MIXIC TRADE (65% exports, 35% imports).

The railroad commercial group warned that their investments in transport infrastructure depend on a growing economy. “When the economy is doing well, we are going well, and we are all interested in making investments to boost economic growth,” said Ian Jeffries, AAR CEO. “Commerce is an essential part of this, either with exports to our US partners or imports coming from our ports.”

Economic impact of railroads

In 2023, US rail transport generated US $ 233.4 billion in total economic production with more than US $ 50 billion in value added to GDP according to AAR. (Data from 2024 on GDP impact will not be available until the fourth quarter of this year.) The sector has generated 749,400 jobs contributing with US $ 66.1 billion in family income .

The five states with the largest number of jobs in the railway sector are Texas, Illinois, Nebraska, California and Georgia . Texas leads the list, as the state deals with almost 90% of US-MEXIC in its four crossings.

AAR reports that the railroads invested approximately $ 26.8 billion in your network last year . “This represents almost all private capital returning to our infrastructure, facilitating international movements,” said Jefferies.

Highlighted infrastructure projects

Among the highlighted projects are:

• A CPKC LARED BRIDGE .
• A International Railway Bridge OttensMeyer .
• O Barstow International Gateway da BNSF (Berkshire Hathaway).
• The intermodal service Falcon Premium at Union Pacific and Mexico Transportes Group which operates between Canada, USA and Mexico.

These infrastructure projects generated thousands of jobs and billions in investments, according to AAR. Union Pacific is also investing in new intermodal ramps in Phoenix, Kansas City e Salt Lake City . In Maryland, CSX and public partners are rebuilding the Howard Street Tunnel To accommodate the traffic of two -story containers, allowing containers to leave Baltimore port faster and reduce congestion on the roads.

“We are seeing investments and new services being made available to serve an international market, ensuring that the United States maintain its global competitiveness and that our economy is ready to grow, transporting products in both directions,” said Jefferies.

Transionic trade

Based on commercial data, the USA-CANADA rail corridor is an important channel for automotive components, oil products, forest and chemical products, reflecting deep industrial integration between the two economies. Trade on the US-Mixic border, according to the AAR report, includes significant volumes of automotive products, agricultural goods and industrial materials.

Transfronho trade is moved throughout 23 Railway Crossings USA-Canada e seven US-MIXIC CROSSES . Each location, according to Jefferies, provides an economic boost for local economies. “Industrial development is an important economic engine,” he said.

Norfolk Southern, for example, invested US $ 4.3 billion in industrial development In its network in 2024, with 149 projects in progress.

Commodities diversification

Most trade moved by cargo railroads, until 70% involves countries outside North America. The range of commodities and cargo is vast. Chemicals (17% of imports and exports ) include ethanol, plastics and industrial chemicals essential for global manufacturing. Almost 40% of US grain exports They are transported by rail to ports or land borders. Metals, including iron and scrap ore, as well as minerals (15% ), are also moved by rail.

Regional examples

On the Canada-Eua border, Illinois It houses the world’s busiest rail center in Chicago: six class I railways, 40 short -line railways and an extensive network of intermodal terminals and classification courtyards that move national and international trade. In 2023, the rail activity in Illinois contributed US $ 4.7 billion in family income and supported 38,600 additional jobs in several sectors.

On the west coast, the California connects the US to global markets through its ports. About 7,000 cargo rail employees work in the state assisting in the movement of intermodal containers, consumer goods, food and chemical products.

“We are all aware of the challenges of the supply chain that the global economy has faced in recent years,” said Jefferies. “We are seeing volumes at the same level, but maintaining a high standard of service. I think railways have shown the disposition and ability to meet immediate demand, but they are also preparing our customers and business for success in the future, making investments now to support the growing demand we expect in the future. ”

With information from CNBC*