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Policy Issues

Trade

AAR POLICY POSITION: Freight railroads support U.S. policymakers narrowly targeting 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.


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 ecommerce.

The 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.

AAR Trade Report

The AAR conducted an assessment of the role that trade plays for freight railroads. Prior analysis conducted in 2016 shows spending by Class I railroads, the seven largest U.S. freight railroads, created nearly $274 billion in economic activity, generated about $33 billion in state and federal tax revenues and supported almost 1.5 million jobs nationally in 2014 alone.

The new trade 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.

Key Analysis Takeaways

  • 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.

Download the Report