Trade and political tensions are taking a toll on Canada’s major railways, and investors are pulling back because the outlook is so uncertain.

Shares of Canadian National Railway Co. slumped 6% on April 29, the most in more than five years, after it reported quarterly revenue of C$4.38 billion ($3.2 billion), slightly below analyst expectations. 

CN’s largest rival, Canadian Pacific Kansas City Ltd., saw revenue drop 2.5% in the first quarter to C$3.7 billion, also missing estimates. Freight revenue from grain was up, but all other categories declined. 

The two Canadian railways serve industrial and resource producers that have been hurt by U.S. President Donald Trump’s tariff policies The outcome of this year’s talks on revising the U.S.-Mexico-Canada Agreement is far from clear, Tracy Robinson, CN Railway’s chief executive officer, told analysts. 

“It’s impossible to predict where the whole discussions on the USMCA or the trade flows — even on the broader tariffs outlook — will land,” she said. “So we’ve assumed and continue to assume, as we look forward, that nothing will change.”

For Canadian National, freight revenue from grain and fertilizers was up 10% compared with the same period last year, helped by the reduction of Chinese tariffs on canola. But revenue from handling metals and minerals was down 11%. Canadian National’s forest products and automotive segments dropped 12% and 5%, respectively.

National Bank of Canada analyst Cameron Doerksen said in a note about Canadian National that “muted volume and earnings growth this year and uncertainty around USMCA negotiations that could impact investor sentiment in the coming quarters inform our neutral view on the stock.” 

The Montreal-based company didn’t change its outlook for the year. Growth in revenue ton-miles — a workload metric — is expected to be flat. Canadian National assumes the Canadian dollar will be worth 73 U.S. cents this year, stronger than its January forecast of 71.5 cents. 

At both companies, earnings per share declined modestly from a year earlier. 

Canadian Pacific Kansas City shares fell 2.8% during the regular trading session in Toronto before its earnings news release. 

Chief Executive Officer Keith Creel said the railway’s results were affected by volatility in fuel and currency markets. The Calgary-based railway has a network that extends from Canada to Mexico after its acquisition of Kansas City Southern. That’s still a competitive advantage, he said, despite the friction between the US and its two neighbors. 

“The bottom line is I think we have three nations that depend upon each other to trade. I think we’re in a unique position to enable that trade,” Creel said. “Short term, I would say buckle up.”