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Policy Issues

​ Freight Rail and International Trade

Freight Rail Policy Stance: U.S. policymakers should narrowly target assistance for U.S. workers affected by trade agreements rather than unraveling policies that would lessen U.S. competitiveness, productivity and participation in international trade.

Why This Matters: The supply chain is integrated, which largely requires a free flow of goods. Undo any part of it — including rail — and policymakers risk undoing today's economic framework and greatly affecting American life as it is experienced today.

By linking businesses to each other here and abroad, freight railroads have played a crucial role in America's economic development for more than 185 years. American life is driven by employment and consumption, which is made possible by domestic and international trade. This trade, which happens across Northern America, depends on manufacturing and creating goods and services, transporting them to market and then selling them via various retail means — in person or through e-commerce.

International trade, facilitated largely through free trade agreements such as NAFTA, has benefited the U.S. economy. By allowing U.S. companies such as freight rail customers access to global markets, businesses and customers American’s gain access to a greater variety of goods at a lower cost. Federal policymakers should be looking at ways to open more markets for trade, not considering policies to unnecessarily stop sustained growth. 

AAR Trade Report

The AAR conducted an assessment of the role that trade plays for freight railroads. The new data show that international trade that American companies conduct supports a huge swath of freight rail operations in terms of personnel, equipment and revenue. Helping American workers displaced by trade agreements is a worthy undertaking, but policymakers must be careful not to enact measures that have the effect of rolling back U.S. participation in trade. Doing so would undermine one of the nation's most essential industries and an essential partner to so many other U.S. industries.

Download the Report >

Quick Facts 

  • At least 42% of rail carloads and intermodal units are directly associated with international trade.
  • More than 35% of annual rail revenue is directly associated with international trade.
  • Approximately 50,000 rail jobs, worth over $5.5 billion in annual wages and benefits, depend directly on international trade.
  • Withdrawing from NAFTA would negatively impact over $1 trillion of North American trade 
  • The agriculture sector exported nearly $43 billion worth of goods to NAFTA partners in 2016 (450% increase since NAFTA’s formation) 
  • In 2015, U.S. companies exported over $30 billion in auto parts to Canada and more than $29 billion in U.S. parts to Mexico

Further Reading