As President Donald Trump prepares to escalate his trade war, railroads across North America are bracing for a massive economic blow. The Association of American Railroads (AAR) reports that the value of cross-border trade between the U.S., Canada, and Mexico reached an estimated $203.1 billion in 2024.
This staggering figure is split almost evenly between U.S.-Canada ($104.8 billion) and U.S.-Mexico ($98.3 billion) trade. The rail sector warns that investments in transportation infrastructure depend on a growing economy, with trade being a key driver of growth.
In 2023, U.S. rail transportation generated $233.4 billion in total economic output, with over $50 billion in direct value-added to GDP. This supported 749,400 jobs and generated $66.1 billion in household income.
The top five states for freight rail employment are Texas, Illinois, Nebraska, California, and Georgia, with Texas accounting for nearly 90% of U.S.-Mexico cross-border trains at its four crossings.
AAR reports that railroads invested roughly $26.8 billion back into their networks last year, primarily private capital used to facilitate international movements.
Projects include:
* CPKC’s Laredo Bridge
* Union Pacific’s new intermodal ramps in Phoenix, Kansas City, and Salt Lake City
* CSX’s reconstruction of the Howard Street Tunnel in Maryland
These investments have generated thousands of jobs and billions in investment, according to AAR.
The U.S.-Canada rail corridor is a major conduit for:
* Automotive components
* Petroleum products
* Forest products
* Chemicals
Trade at the U.S.-Mexico border includes significant volumes of:
* Automotive products
* Agricultural goods
* Industrial materials
Each location provides an economic injection into local economies, with industrial development being a key driver.
The largest share of trade (up to 70%) moved by freight rail involves non-North American countries. Commodities and freight range from chemicals and ethanol to metals and minerals.
Serving the Canada-U.S. border, Illinois is home to the single busiest rail hub in the world: Chicago’s six Class I railroads, 40 short-line railroads, and extensive network of intermodal terminals and classification yards that move national and international commerce.
In 2023, rail activity in Illinois contributed $4.7 billion in household income and supported 38,600 additional jobs across various industries.
On the West Coast, California links the U.S. to global markets via its West Coast ports. Close to 7,000 freight rail employees work in the state, assisting in the movement of intermodal containers, consumer goods, food products, and chemicals.
Railroads have shown a willingness and ability to meet immediate demand but are also setting customers and businesses up for success by making investments now to support expected increased demand in the future.
Source: CNBC
