Breaking News

Major U.S. railroads warn Trump against derailing NAFTA

Stock MarketsJan 17, 2018 07:00PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. A Union Pacific rail car is parked at a Burlington National Santa Fe (BNSF) train yard in Seattle

By Eric M. Johnson

LOMBARD, Ill. (Reuters) - Major U.S. railroads on Wednesday warned President Donald Trump of the potential financial and political consequences of scrapping the North American Free Trade Agreement and urged U.S., Mexican, and Canadian officials to find ways to modernize the accord.

Trump has threatened to withdraw from the agreement, which is heavily utilized by U.S. and Canadian railroads hauling freight such as cars, beer, and grain across the three countries.

Some 35 percent of annual U.S. rail industry revenue is directly linked to international trade, according to the Association of American Railroads lobby group.

Kansas City Southern (N:KSU) Chief Executive Officer Pat Ottensmeyer told Reuters at a rail shippers' conference that scrapping NAFTA would put supply chains, jobs and consumers at risk and could come back to haunt Trump politically.

Cross-border rail trade between the United States and Mexico is dominated by Kansas City Southern. More than a quarter of its revenue comes from U.S.-Mexico shipments, and grain from American farms forms an important portion of cross-border carloads.

Ottensmeyer said many farmers who supported Trump in the 2016 election support NAFTA and are becoming critical of Trump's threats to scrap the accord.

"You won't talk to a single farmer who is against NAFTA," Ottensmeyer said. "They did not vote for Donald Trump because of NAFTA, they decided to set that aside. I think (Trump) is beginning to understand that, the more time he spends in rural America."

"Be careful what you do here," he said.

Washington has taken a hard line in talks, saying that concessions are the only way for Canada and Mexico to keep the deal. Talks appear to be stalled heading into the penultimate round of negotiations scheduled to begin next week in Montreal.

"It's certainly out of date; it's old, so fix the things that need to be fixed but to wholesale walk away from it doesn't make a lot of sense to us," Union Pacific Corp (N:UNP) Chief Marketing Officer Beth Whited told Reuters.

No. 1 U.S. railroad Union Pacific serves all the main U.S.-Mexico rail gateways.

For example, Union Pacific hauls "a ton of Corona" beer and bottles and recycled glass to and from a Constellation Brands Inc (N:STZ) brewery in Mexico and made "a huge investment in Texas to support that, creating American jobs."

"NAFTA is a job creator," Whited said. "Union Pacific jobs are American jobs."

No. 3 railroad Norfolk Southern Corp (N:NSC) declined to comment.

Major U.S. railroads warn Trump against derailing NAFTA

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email