The Moment of Truce

Railroad Weekly May 19, 2025

Inside This Issue

· Moment of Truce: A Pause in the Great Brawl of China

· Late Haul of China: An “Air Pocket” Hitting U.S. Ports

· Railer Coaster: RR Stocks Surge as Truce Allays Stress

· Little to No Sino Flow: RRs Emphasize Their Limited China Exposure

· Expansion Hopes Alive: RRs Still See Growth in 2025

· Freight Fright? Tariffs Per Se Don’t Scare; It’s a Recession RRs Fear

· Picking Up the Prices: Walmart to Pass Some Tariff Costs to Shoppers

· Metallurgical Wound: Prices Way Down for Steelmaking Coal

· Come Together: CSX Yearns for Single-System Conductor Contract

---

Does your organization have multiple people interested in reading Railroad Weekly? Consider an Enterprise License. Email jay@railroadweekly.com for details.

Track Talk

“Productivity is like religion for us.”

-Union Pacific CEO Jim Vena

The Latest

· Thank goodness. Relief. A three-month tariff détente between the U.S. and China lowered the temperature from about three hundred degrees Fahrenheit to something more survivable—but still not comfortable. Roughly speaking, U.S. tariffs on Chinese imports will temporarily drop to 30%, from 145%. It was enough to energize investors, who sent stocks—including railroad stocks—soaring.

· Corporate America, however, along with smaller businesses and households, appear less assuaged. The largest American company of them all—Walmart—said last week that “even at the reduced levels, the higher tariffs will result in higher prices.” Speaking on behalf of small businesses, the U.S. Chamber of Commerce said the three-month truce was “good news.” But “even with this China agreement, tariffs are much higher overall than they were at the beginning of the year, and many businesses, especially small businesses, are dealing with growing costs and disruptions.” A Bloomberg News headline made the point more directly: “Trump’s Pause on China Tariffs Is Still a ‘Huge Nightmare’ for Small Businesses.” Consumer confidence, meanwhile, remains way down from levels earlier this year, according to a closely-watched University of Michigan survey—the latest survey, to be clear, was conducted before last week’s China truce.

· A separate three-month pause on “reciprocal” tariffs aimed at other countries, remember, ends in early July. One of those countries is Vietnam, where many U.S. firms started moving production after President Trump applied tariffs on China during his first term. The tariff on Vietnamese exports is set to be 46%. But will this change before July? Will rates on other countries change? Speaking to investors last week, several Class I railroad executives seemed convinced that more tariff policy changes are indeed coming. And so, uncertainty continues to loom large.

· The 145% China tariffs—essentially a trade embargo—lasted from early April to mid-May. And during that time, container shipments from China to the U.S. plummeted. Ports like Los Angeles are now seeing a plunge in activity, which railroads and their