This story originally appeared on Trains.com.

President-elect Donald Trump’s plans to impose 25% tariffs on goods imported from Mexico and Canada could have a chilling impact on cross-border rail traffic, which has been one of the few sources of volume growth for North American Class I railroads.

Trump announced the plans Monday night in a social media post, saying he would sign an executive order on Jan. 20, 2025, his first day in office. The order also would hit goods produced in China with a further 10% tariff.

In his 2016 campaign, Trump called NAFTA the worst trade agreement ever and pledged to rip it up. Instead, the treaty was modernized and given a new name, the United States-Mexico-Canada Agreement. It went into effect in July 2020.

Canadian Pacific Kansas City — the only railway to link Canada, the U.S. and Mexico — faces the most risk if the tariffs are imposed.

In 2023, some 41% of CPKC’s $8.9 billion in revenue was tied to cross-border trade: 16% from Canada to the U.S.; 12% from the U.S. to Mexico; 6% U.S. to Canada; 5% Mexico to the U.S.; and 2% for traffic moving between Mexico and Canada.

CPKC is relying on a combination of trade growth, single-line service and market share gains from trucks and other railroads to help pay for the 2023 $31 billion merger of Canadian Pacific and Kansas City Southern.

“In spite of all this talk about tariffs, these three countries have never needed each other more,” CPKC CEO Keith Creel told the RailTrends conference earlier this month, before Trump put particulars around his plans for tariffs on imports from Canada and Mexico.

Creel noted that “there was a lot of aggressive rhetoric” about North American trade after Trump was elected in 2016. Yet while USMCA was being negotiated, trade grew 20%, Creel says.

And since the pandemic hit in 2020, manufacturers and retailers have been trying to diversify their supply chains, which has included near-shoring of manufacturing to Mexico.

“How do you unwind that,” Creel says, “and why would you?”

Canadian National is not far behind CPKC in its dependence on North American trade. Some 32% of its $11.9 billion in 2023 revenue was tied to U.S.-Canada cross-border traffic.

CPKC’s and CN’s cross-border traffic includes metals and minerals, forest products, petrochemicals and plastics, and auto parts and finished vehicles.

Mexico is an important traffic source for Union Pacific, the only railroad to serve all six U.S.-Mexico gateways. In 2023, 11% of the railroad’s volume — roughly 891,000 loads — was tied to Mexico.

UP considers cross-border traffic to be an important source of traffic growth. Last year, UP’s Mexico cross-border traffic was 59% intermodal and automotive, 21% bulk (mostly grain), and 20% industrial products.