2 rail strikes, 3 U.S. sectors in trouble: $277 billion worth of goods at stake as Canadian unions demand new contracts – AGCO (NYSE:AGCO), Canadian National Railway (NYSE:CNI)

The rail strike in Canada could have a significant impact on various sectors and companies in the United States that rely on goods and raw materials from the world's second-largest company.

Canadian National Railway Company CRF And Canadian Pacific Kansas City Ltd. CP Reuters reported that they locked out their workers and closed their networks in Canada early Thursday after wage negotiations with the Teamsters Canada Rail Conference failed to result in a new collective agreement.

Canada uses the railway extensively to export grain, automobiles, potash, coal and other goods sold by companies – valued at about $277 billion annually.

The failure of these two Canadian railways on Thursday could prove to be a major shock to U.S. companies and industries as they transport large amounts of goods and raw materials in North America.

The Canadian National Railway Company operates a 20,000-mile railway network that stretches across the width of Canada, following the Mississippi River to the Gulf of Mexico.

Canadian Pacific Kansas City also operates a 20,000-mile network that covers Canada from east to west, but also extends through the United States and into Mexico.

Also read: Transatlantic container transport volumes rise amid possible strike at US ports

Here are some sectors that could be affected by the rail stop:

automobile

According to the International Trade Administration, the United States imported and exported about $73 billion worth of transportation equipment from Canada in 2023. Canadian National's website says the company transports over 2 million finished vehicles annually and serves 12 North American vehicle assembly plants.

Canadian Pacific Kansas City supplies about 90 percent of automobile assembly plants in Mexico, according to the company's website.

Price promotion: The major car manufacturers showed mixed developments until Thursday afternoon.

• Ford Motor Company F rose 0.69% to USD 10.93
• General Motors GM rose 0.05% to $46.58
• Stellantis NV STLA fell 1.30% to $16.34
• Tesla subsidiary TSL fell 3.84% to $214.70

Wood

According to Canadian government data, Canada's lumber exports totaled $3.5 billion in 2022.

Pulp producer Mercer International MERC announced that it was working on contingency plans for alternative transportation methods in response to the strike.

Price development: The prices of the major timber traders and producers recorded a downward trend on Thursday.

• Home Depot, Inc. HD fell 1.17% to USD 366.12
• Lowe’s Companies, Inc. LOW Down 0.68% to USD 240.72
• Weyerhaeuser Company WY fell 0.53% to $30.25
• West Fraser Timber Co. Ltd. WFG fell 0.61% to $80.52

Cereals and agricultural products

Nearly three dozen North American agricultural associations have warned that a simultaneous halt would have serious consequences for commodity exporters in Canada and the United States.

Price promotion: Major producers of grain and agricultural products suffered losses on Thursday.

• Tyson Foods TSN Down 0.60% to USD 62.93
• The mosaic company MOS fell 0.29% to $27.84
• AGCO AGCO slipped 0.32% to $89.19

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