Freight Railroads & International Trade

International trade plays a massive and growing role in the U.S. economy. For the U.S. economy as a whole, exports and imports combined are equivalent to around 27 percent of GDP, up from around 17% 30 years ago.

For U.S. freight railroads, international trade plays an even greater role: at least 42 percent of the carloads and intermodal units railroads carry, and more than 35% of rail revenue, are directly associated with international trade. (If freight indirectly associated with trade were included, the rail figures would be even higher.)

The rail industry in many ways exemplifies the integrated nature of today’s global economy. To be sure, globalization, like technology, has harmed some U.S. workers, and policymakers should work to ameliorate that harm in targeted ways. But turning our backs on international trade — for example, by imposing excessive tariffs on imports — would do far more harm than good. It would significantly worsen our nation’s economy, weaken key sectors, and diminish our quality of life. Policymakers should not deprive Americans of the tremendous advantages brought about by engaging fully in the global economy.

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