Tariffs will ‘negatively impact’ MBTA rail car construction, Chinese firm says
The Trump administration’s trade war with China and across-the-board tariff policies will have a negative impact on the production of Orange and Red Line MBTA train cars, according to the Chinese-owned firm building the cars in Springfield.
A spokesperson for the China Railway Rolling Stock Corporation‘s Bay State subsidiary, CRRC MA, said the company is committed to seeing an already overdue and over-cost agreement to build new train cars for the MBTA through to the end — but noted shifting U.S. trade policies will inevitably affect their work.
The CRRC is one of the many manufacturers “that must pay added tariffs according to the recent Executive Orders and Reciprocal Tariff Policy,” said spokesperson Lydia Rivera.
Rivera said tariffs are “increasing project costs and straining operations” at their Springfield plant.
“The burden of increased tariffs, including the uncertainty of recurring tariffs will force operational adjustments and negatively impact rail car production,” Rivera told the Herald.
CRRC MA is a registered U.S. corporation, according to Rivera, though the parent company is a Chinese state-controlled business entity. The rail cars are produced domestically, but are nevertheless still impacted by the Trump administration’s global tariff policy.
According to the CRRC, the tariffs are hitting U.S.-based domestic producers if, as is the case with their company, their supply lines cross national borders.
“The sudden, dramatic and unprecedented increase in United States tariff rates on foreign nations is impacting the supply chain as suppliers who procure materials or components internationally will be adversely affected by the increased tariff rates,” Rivera told the Herald.
Nevertheless the rail car company, she said, “continues to deliver quality Orange and Red Line vehicles to the MBTA and remains committed to completing this project.”
Rivera did not provide any specifics on how the tariffs would impact production or how it might affect their delivery schedule, but did say the company would seek additional support “from our partnering transit agencies and the Massachusetts delegation as we face the burden of new tariffs.”
MBTA spokesperson Lisa Battiston indicated that the transportation agency is actively communicating with all of its contractors about new U.S. trade policies while evaluating the “impacts on existing and future contracts.” In the interim, Battiston said, work in Western Massachusetts to build modern train cars is ongoing.
“The new tariffs are being assessed, and the potential impacts are still being determined for various purchases that have components from abroad. The assembly of Red and Orange Line cars in Springfield continues and the cars accepted to date are of high quality and are performing well,” Battiston said.
According to the MBTA, uncertainty over tariff policies and increased cost brought by federal trade decisions is outweighed by the cost of procuring a new contract for rail car construction, especially while the current contract continues to see “high quality cars” delivered at a “reasonable” price.
The MBTA also indicated that they would have more information to share with the public if and when federal policies directly impact rail car delivery schedules.
The Chinese company has made the same sort of assurances to the MBTA that they offered the Herald, according to Battiston, but apparently included an indication that tariffs may cause some difficulties for CRRC suppliers.
“CRRC MA leadership assures us they are committed to the contract but the new tariffs will likely have impacts on their subcontractors, including the suppliers of materials,” she told the Herald.
MBTA General Manager Phil Eng warned the T’s Board of Directors in March that tariffs would hit the rail industry as a whole, and indicated he’s heard concerns from fellow transit chiefs.
“Everyone is monitoring what those tariffs mean because all of the components, even the ones being built here in the U.S., procure materials from across the globe,” he said.
The MBTA has ordered 152 new Orange Line cars and 252 new Red Line cars. The total cost of the contract, first awarded in 2014 under the Patrick administration, now stands at more than $1 billion after the MBTA added an additional $148 million to the deal last year. The cost per new Orange and Red Line car is about $2.5 million.
That contract adjustment came as the company struggled to maintain their delivery schedule among residual pandemic-related work slowdowns. All of the cars were originally due for delivery by 2023, but less than a third had been delivered by that time.
Eng indicated earlier this year that under the delivery schedule worked out in 2024, he expects all of the new Orange Line cars to be in service by the end of 2025 and any remaining Red Line cars to hit the rails before the end of 2027.
