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New Study Highlights Benefits of International Trade for the Rail Industry

by Clark Packard / /

Over the last couple years, National Taxpayers Union (NTU) has been disheartened by the misleading attacks politicians have leveled against the United States’ free trade agreements and trade in general. As a result, NTU believes it’s imperative to show why trade is beneficial to taxpayers and a wide variety of important industries. Indeed, the case for free trade remains as strong as ever and a recent study from the American Association of Railroads (AAR) confirms how vital it is to the rail sector.

As goods are manufactured, they must be transported for consumption by either downstream manufacturers of the product or end users. Rail is integral to supply chains and the distribution network for these products. AAR’s study confirms that the rail system is central to the United States’ successes in the global market. For instance, 42 percent of railcars and “intermodal units are directly associated with international trade.” Thirty-five percent of the rail industry’s annual revenues is directly dependent on trade. In 2014, U.S. freight rail “moved more than 171 million tons of import products” and 329 million tons of exports. It is estimated by the freight rail industry that 50,000 rail jobs, accounting for approximately $5.5 billion in annual wages, are tied to shipping internationally traded products. These are impressive figures.

The United States’ commitment to an open and expanding economy stands at a crossroads. As the study noted, “American life is driven by employment and consumption, which is made possible by domestic and international trade.” The protectionist tide is rising faster than at any time since the Great Depression. As policymakers in Washington – both in the administration and on Capitol Hill – begin shaping trade policy for the future, it is important to remember that the free flow of goods across borders is crucial to the U.S. economy.