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(Bloomberg) — US tariffs on commodities and the resulting uncertainty led to more than C$550 million ($406 million) in forgone revenues last year at Canada’s two largest railroad operators.
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President Donald Trump’s administration caused turmoil in global trade by adding sweeping import tariffs in 2025, including 50% on steel and aluminum, and 10% on lumber in addition to separate duties of 35% for Canada.
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Canadian National Railway Co. reported Friday that revenue in the fourth quarter fell by 4% in metals and minerals, and 8% in forest products, compared with the same period in 2024. “Trade uncertainty and volatility impacted our full-year 2025 revenues by over C$350 million,” Chief Commercial Officer Janet Drysdale said during a call with analysts. “We are open-eyed about the difficult environment in which we’re operating.”
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On steel, Drysdale added that the railroad was working “hard on mitigating the trans-border headwinds with opportunities into Canada.” Forest products, meanwhile, are also hit by softening demand in home construction.
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The head of Canadian Pacific Kansas City Ltd., Keith Creel, said Wednesday that the company “absorbed a pretty significant hit from all the uncertainty” with C$200 million or more of revenue impact.
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CN and CPKC, which have networks spreading into the US, still managed to increase their annual revenues by 2% and 4%, respectively. Both railways also decreased their operating ratio — a key gauge of railway efficiency that measures expenses as a percentage of revenues.
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Outlook
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CN said the growth of its adjusted diluted earnings per share in 2026 should slightly exceed its volume growth, which is expected to remain flat.
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“We do have some notable headwinds this year, which will weigh on margins,” Chief Financial Officer Ghislain Houle said on the call, including less metal and forest products traffic.
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National Bank of Canada analyst Cameron Doerksen wrote in a note to clients that “while the stock’s valuation is inexpensive, muted volume and earnings growth as well as ongoing macro uncertainty inform our neutral view on the stock.”
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Shares of CN were down 3% to C$132 in Toronto at 12:43 p.m.
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(Update with CN’s outlook, analyst comment and share price in the last four paragraphs.)
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