Canada rail strike: How would the train strike affect the US?

Canada’s two largest railroads, Canadian Pacific Kansas City and Canadian National, are locked in a labor dispute with the Teamsters union that threatens to spark strikes that would directly impact cross-border trade with the United States, according to CBS News insiders.

For now, both railroads have stopped accepting certain shipments of hazardous materials and refrigerated products, while starting Tuesday, Aug. 20, Canadian Pacific Kansas City will stop all shipments originating from both the United States and Canada. Meanwhile, Canadian National has already banned the import of containers from United States railroads.

While negotiations between the railroad workers and the union are ongoing, there has been no significant progress in lobbying so far. According to Jeff Windau, an industrial analyst for Edward Jones & Co., the work stoppages are expected to last only a few days; otherwise there could be significant disruptions to the supply chain.

“If something were to drag on for longer, I think there would be some significant potential problems given the amount of freight that is handled every day,” Windau told CBS News. “In general, railroads affect almost the entire economy.”

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Canada rail strike: How would a train strike affect the US?

According to Windau, Canadian Pacific Kansas City and Canadian National transport about 40,000 railcars of freight each day, valued at $1 billion.

This means a rail strike in Canada would significantly disrupt supply chains, causing damage to a range of sectors, including the auto, chemical and agricultural industries.

Since a strike would disrupt U.S. supply chains, the halt in operations would severely affect the U.S. economy, specifically areas that rely on cross-border trade and key industrial sectors.