As the principal hub of North America’s rail sector, the United States has the largest rail network and a substantial share of the continent’s railcar production and maintenance capacity.

Every day, goods worth billions of dollars traverse the integrated U.S.-Canada-Mexico rail network and its more than135,000 miles of track. The North American rail network is essential to America’s supply chain resiliency, national security and economic industry.

• In 2024 alone, more than $203 billion in trade value moved by rail between the U.S. and our neighbors.
• The U.S. railcar industry had a total economic footprint in 2024 that generated $36.0 billion in output, $14.9 billion in GDP contribution, and 112,200 family-wage jobs in the U.S. (Oxford Economics). This outsized contribution includes direct manufacturing and the extensive supply chain and induced economic activity surrounding it.
• Every new railcar built in North America also strengthens the resiliency and safety of the entire continent’s supply chain by ensuring we are not reliant on overseas suppliers for critical equipment. This includes everything from the railcars that carry goods to the specialized components and services that keep those railcars safe.

The Threat

When China’s CRRC entered Australia in 2008, the country still had a thriving rail rolling stock manufacturing base. However, eight short years later, every Australian railcar manufacturer had ceased production or gone out of business, and within less than a decade, CRRC had wiped out the domestic freight rail manufacturing sector, gaining effective control of the entire market.

CRRC’s attack in Australia mirrors its playbook in the passenger rail sector, where it relies on massive Chinese state subsidies to submit bids below cost and leverage political influence to displace local industry.

CRRC is a $35 billion state-backed conglomerate that benefits from an estimated $2.6 billion in direct government subsidies from 2014 to 2024, enabling it to consistently underbid and undercut market-based competitors.

Without implementing safeguards throughout the North American rail sector, China can and will erase our industrial base and repeat its Australian freight rail takeover in North America.

The USMCA Joint Review presents an ideal opportunity to incorporate provisions that treat the continent as a unified front, protecting its domestic industries from predatory Chinese practices. This means leveraging the strength of our three-nation partnership to prevent state-owned enterprise (SOE) rail equipment from entering our integrated market.

In the U.S., the Transit Infrastructure Vehicle Security Act (TIVSA) and the Stopping America’s Foreign Enemies Through Rail and Infrastructure National Security Act (SAFE TRAINS Act), have established strong protections in their respective domains. Extending these protections through the USMCA framework could ensure that no Chinese state-owned enterprises could bid on public transportation projects in North America, and that no freight railcars with more than a minimal level of content from such countries could be imported or put into service in North America.

USMCA already contains State-Owned Enterprise disciplines and language on non-market economy practices. Now is the time to bolster that safeguard with explicit language targeting the unique challenges posed by Chinese state entities in critical infrastructure sectors like rail.

 

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