Union Pacific CEO Lance Fritz says US-China trade dispute has gone too far

RELATED TOPICS: UNION PACIFIC | POLITICS | REGULATION
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LanceFritz
Union Pacific CEO Lance Fritz
Union Pacific
OMAHA, Neb. — The Trump Administration’s trade battle with China has gone too far and will do serious damage to the U.S. economy the longer tariffs remain in place, Union Pacific CEO Lance Fritz says.

About 40% of UP’s traffic originates or terminates outside the U.S., so trade has a big impact on the railroad’s volumes, Fritz noted in a wide-ranging interview with Steve Forbes last week. 

UP’s traffic volume is down 6% this year through Nov. 16. But the traffic decline has accelerated over the past few months, with UP’s overall traffic down 10% since Oct. 1, including a 12% drop in intermodal traffic.

The Trump Administration was right to use tariffs to get China to the negotiating table, Fritz says. And he says the U.S. needs free trade deals that are fair and are in the spirit of World Trade Organization agreements.

“I won’t argue against the initial use of tariffs to get China to the trading table,” Fritz says. “I will argue that the approach of putting every purchase from China into a 25% tariff is going to be incredibly damaging to our economy over the long run. And the longer those tariffs are in place it will be incredibly damaging to our economy. We have to be sensible about how we apply pressure in other ways.”

The U.S. should enlist the aid of other trading partners and use other diplomatic tools to put pressure on China, Fritz suggests.

“The longer and the deeper tariffs go, and the broader they’re applied, the more harm they do to the U.S. economy,” he says.

Fritz praised the Trump Administration for its handling of the USMCA trade deal that is set to replace the North American Free Trade Agreement. The deal addresses many of NAFTA’s shortcomings, Fritz says, and should be ratified as soon as possible.

Trade with Mexico and Canada is critical to the U.S. economy, Fritz says.

Fritz and Forbes also discussed the rail industry’s adoption of technology, including positive train control, the prospects of increased regulation, and the need to fully fund the Highway Trust Fund and ensure that trucks pay their fair share of road costs.

NEWSWIRETrains News Wire

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