Esther Fung of The Wall Street Journal reports that railroad boss Keith Creel, CEO of Canadian Pacific Kansas City, and his executive team have spent recent weeks trying to reassure spooked shareholders that Donald Trump’s threat to impose new 25% tariffs on Mexico and Canada won’t disrupt CPKC’s business and that the logic of its network still holds. Fung writes:
Railroad boss Keith Creel drove a shiny ceremonial spike through the track in Kansas City, Mo., last year to celebrate a $28 billion deal that forged the only freight railroad that directly connects Mexico, the U.S. and Canada.
Affixed to his gray-striped suit was a lapel pin with the flags of the three nations.
His corporate creation, called Canadian Pacific Kansas City, or CPKC, operates a 20,000-mile network stretching from Canada’s ports on the Pacific and Atlantic coasts through Midwest rail hubs such as Chicago and down to factories and seaports in Mexico.
The railroad is the ultimate bet on the promise of the free flow of goods and a key cog in an intricate supply chain that underpins North American trade. It is a bet that suddenly got a lot riskier. Donald Trump’s election victory sparked a small selloff in CPKC’s shares and the president-elect’s threat last week to impose new 25% tariffs on Mexico and Canada further spooked investors. […]
Ackman has been saying something similar. The billionaire, whose investment firm Pershing Square owns around a 1.6% stake in CPKC, said he remains optimistic about the prospects of the railroad in an investor call on Nov. 21.
“I think he’ll [Trump] be sophisticated in how he uses the negotiating power of tariffs to maximize U.S. interests. But I think the overarching goal here is economic growth for the country,” Ackman said. […]
In an interview in 2021, when Canadian Pacific won a bidding war for Kansas City Southern, Creel said he expected more shippers to shift from clogged U.S. ports to less-busy ones in Mexico. And he said the combined CPKC would boast “a network that will never be replicated.”
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