Trump Promises “Fast Trains,” Japan’s Railway Stocks Soar

Do Trump and California suddenly see eye-to-eye on high-speed rail?

President Donald Trump met with airline CEOs at the White House on Thursday. At the core of the discussion was the overhaul of the Federal Aviation Administration, including changes to the “totally out of whack” national air-traffic control system. He had other goodies for the airline CEOs.

Afterwards, Southwest Airlines CEO Gary Kelly told reporters that the meeting had been “delightful.” It seems they’d gotten pretty much what they’d wanted. “We are very well-aligned on some very key topics: income tax reform, regulatory reform, and especially growing our industry,” he said.

But something wasn’t picked up by the US media, though it was picked up by hedge funds and other speculators: In his remarks, Trump mentioned high-speed rail in the US. And on Friday, Japanese stocks dealing with high-speed rail systems soared on huge volume! And even in China, it happened.

In his remarks (transcript) to the aviation CEOs, Trump said this about US high-speed rail, while complaining about airports:

As an example, some of you were saying yesterday to me that you go to China, you go to Japan, they have fast trains all over the place. We don’t have one. I don’t want to compete with your business — (laughter) — but we don’t have one fast train.

And a few sentences on US airports and the Middle East later, he added:

And we have an obsolete plane system, we have obsolete airports, we have obsolete trains. We have bad roads. We’re going to change all of that, folks. You’re going to be so happy with Trump. I think you already are.

“We’re going to change all of that, folks.” And that apparently includes high-speed rail in the US.

This was followed up by Japanese Prime Minister Shinzo Abe, who after his meeting with Trump on Friday in his remarks (transcript) mentioned investment by Japan Inc. in the US, and then veered into high-speed rail and what Japanese companies with expertise in high-speed rail could do in the US to help move these projects forward. It would be nurtured with federal stimulus funding:

With President Trump taking on the leadership, I’m sure there will be — major-scale infrastructure investment will be made, including the fast-speed train.

Those of you who have rode on the Japanese Shinkansen, I’m sure you would appreciate the speed, the comfort and safety with the latest maglev technology. From Washington, D.C. to New York, where Trump Tower exists, only one hour would it take if you ride the maglev train…. Japan, with our high level of technical capability, we will be able to contribute to President Trump’s growth strategy.

But in the US, no one paid attention to this…

Not even those Republicans who’ve been vigorously opposing the high-speed rail project in California which has been steeped in controversy from the official day one, which was in November 2008, when California voters approved a proposition for funding the project. By early 2012, even I, a supporter of high-speed rail to connect large urban areas that are not too far apart, was beginning to snicker about how we’d been baited-and-switched and how it has gone nowhere. Today, it still has gone nowhere, though the price tag has changed and more money has evaporated.

So are Trump and California suddenly seeing eye-to-eye on something? Namely high-speed rail? And will Trump – who’d threatened to “defund” this “out-of-control” state – include California’s high-speed rail project in his $1-trillion infrastructure wish list, if it ever takes off? Governor Jerry Brown did you listen to Trump’s remarks?

Other states too have high-speed rail projects, including Texas and Florida. So for suppliers of high-speed rolling stock, technology, signaling, etc., this could be big bucks.

Speculators such as US hedge funds that gamble in Japanese stocks certainly seem to think so – at least for the moment.

Nippon Sharyo, of which Central Japan Railway Company holds 50.1%, makes trains, including the high-speed Shinkansen trainsets. It already has a plant in Illinois. Its shares soared 18% on the Tokyo stock exchange on Friday early on to a high of ¥332 before easing back to ¥322, up 14.6% for the day. Volume soared to nearly 5.3 million shares:

Daido Signal, which makes railway signaling equipment, after surging as much as 15% in early trading on Friday, ended the day up 9.2%.

Shares of Kawasaki Heavy Industries jumped 4.5% on Friday. Commuter trains and subway trainsets of Japan’s largest manufacturer of rolling stock are already cruising around US cities, and it produces trains in the US. So it might have a leg up.

Even in China, Trump’s high-speed rail enthusiasm caught on. CRRC, which makes rolling stock including high-speed trainsets, saw its shares jump 5% early on.

Alas, as so many times, these Trump-induced stock surges or plunges tend to run out of steam before reality sets in once again as the traders that follow Trump’s every breath abandon the trade. In early trading on Monday, Nippon Sharyo is down 1.6%, Diado Signal is down 1.9%, but Kawasaki Heavy edged up 0.5%.

High-speed rail in the US progresses at snail’s pace, if at all. Just trying to lay the track, which needs to run in as straight a line as possible and tends to cross private land where landowners and homeowners really don’t want a high-speed train go by every 20 minutes, triggers endless court battles. This is in part why the project in California has become such a fiasco. So real investors, rather than just short-term traders, who want to ride this to big profits better be ready to practice infinite patience.

It remains unclear how this scenario fits into Trump’s plans to deal with the US trade deficit with China, Japan, and other countries – after 25 years of apathy. Read…  This Is How Out-Of-Whack US Trade Relationships Really Are

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  59 comments for “Trump Promises “Fast Trains,” Japan’s Railway Stocks Soar

  1. RD Blakeslee says:

    Mr. Trump impulsively commits to people and ideas based upon his insights – a way of going not easily appraised.

    Anyway, I wish someone could tickle his impulse button with the thought that a good capital investment would be a modern analogue of the REA (Electricity in all households) – This time, broadband fibre installed to every dwelling in the U.S.

    • Ethan in Northern VA says:

      Datacoms like Verizon see physical plant as dead. Wireless is the future, no real estate taxes and bribes need to be paid.

      • RD Blakeslee says:

        Problem with wireless is capacity limitation. Fibre can carry more than 15 times as much data per second as wireless:

        “The current world record for wireless, held by CSIRO, is 6Gbps. … but the corresponding world record for fibre is 100Gbps. Unfortunately these record holding speeds are not yet available en masse!

        • Kent says:

          Streaming at full resolution to your shiny new 4K tv will require about 15 Mb/sec. This will easily be handled by 5G LTE networks assuming you can get the appropriate density. 5G is supposed to be available in 2020 but will take a few years to build out.

          If we want to continue to allow the private sector to provide Internet access, I’d much prefer to push 5G over fiber. You can have a number of organizations compete for your business versus just 1 or 2 providers now.

  2. NotSoSure says:

    Having traveled quite a few times using the Shinkansen, the Chinese high speed trains, and even the multiple Euro trains, I am skeptical that the Shinkansen experience can be replicated here.

    What makes the Shinkansen special IMHO is the total system which includes the operators, conductors, passengers, etc. Human beings actually ADD to the system, which then gets reflected in terms of punctuality, service, cleanliness, etc.

    The MUNI operators, the Chinese, the Europeans, etc just can’t compete. For those human beings need to be removed as much as possible from the equation. Heck I still recall the toilets on the Euro trains. They were NASTY.

    • VarAway says:

      Euro trains with nasty smelly toilets?
      I thought we were talking about high speed trains.
      Like the French TGV & Thalys network.
      They start building this high speed rail network already
      during the late sixties, mind you.
      The present TGV network has been rolled out all over France.
      It’s absolutely STUNNING. ( I am NOT French by the way )
      When you are in France, you should try it.

      • NotSoSure says:

        Hi yes, I actually spent a couple of months crisscrossing Europe a couple of years ago, so I am very familiar with both the high speed and the slower regional/local trains in multiple European countries. Not every high speed train had a nasty toilet, if you travel earlier in the day, they were totally fine, but the later in the day you travel, the nastier they tended to be. This does NOT happen in Japan. Anyway, leaving toilets aside, punctuality, etc did not match up either. The Shinkansen measures their punctuality in SECONDS AFAIK.

      • Paulo says:

        My brother had lived in Paris for almost 40 years. They rented in Paris, but owned a place in the middle of the Country that they tried to visit every other weekend and for all holidays. They could not wait for high speed rail.

        And then after they began the service? They could not afford to vist their home as often. Too expensive.

        Of course the US has that money tree to pay for everything. Maybe the Mexi…oops, maybe the airlines will pay for it.

        Just where does Trump think the money will come from? Tea Part Congress + Dems? Not likely.

        Look for new bus services as this baby winds down. :-)

    • Kent says:

      I’ve spent time on the Spanish Renfre line. Clean, fast, quiet, and you can get a glass of wine while listening to classical music while watching the Spanish country side roll by.

    • RDE says:

      I know I’m not talking about high speed rail (except in comparison to sitting at a dead stop on a freeway) but if you want a really, really Nasty experience ride the BART from the airport to downtown SF. Kind of like being locked in a container with 100 cats in heat. American technology at work.

      Then fly up to Vancouver and take the SkyTrain from the airport to downtown. Brand new, smooth and quiet. And filled to capacity from the very first day of operation.

      • Wolf Richter says:

        BART isn’t the greatest, for sure. And it’s getting old. But I ride it from time to time, and it’s OK. I never once duplicated your observation. And some sections actually have a nice view (rather than tunnel view).

        • NotSoSure says:

          BART seats are nasty although I’ve noticed some attempts at replacing them, took them a while though.

          The worst thing about BART is when there are “medical emergencies.” I am not being unsympathetic, but this system has been running for 30 years(?), by this time, they should know how to handle that kind of situation pronto, but no, every single time, there will be an hour plus delay. Heck, even if there are no medical emergencies, when the system chokes, it chokes hard.


          People only care about maglev/hyperloop/new cool tech, but as I’ve mentioned before, riding the Shinkansen is to appreciate the whole system. It will never be replicated anywhere in the world.

          One thing to note though: for BART like services, they should hire the Hong Kong MTR when the system is up for redesign. Even some of the biggest Chinese mainland cities utilize those guys (for both design and operational) and in my personal experience it’s done really well. And like any world class service, the MTR puts up their metrics real time for everyone to see at their Central (most busiest) station.

        • RDE says:

          re cats in heat:

          When half the wheel bearings are devoid of lubrication (because the money to maintain them had found a new home?) that is exactly what riding the BART sounds like! LOL

      • Anon says:

        One of BART’s biggest shortfalls was its failure to use the same rail gauge as that of the railroads back when construction started in the 1960’s. It made the system much less flexible than it might have been. There is also the problem of greedy unions who have managed to capture a big chunk of the revenue that goes into the system. Public transportation unions should be prohibited from striking, period. Public safety is also a concern around some stations which should be entirely avoided.

        Once upon a time, Toronto’s original Yonge St. subway line was so clean that you could practically eat off of the station floors. Now some repairs can take years to complete and some never seem to get done at all.

      • tomyam says:

        Try Airline in Bangkok, nice, clean. People stay in line to get in. Announcements in two languages. Very positive experience.

  3. nick kelly says:

    Ratings agency Fitch has downgraded economic outlook citing the uncertainty created by Trump.
    But could ‘uncertain’ possibly mean a better outcome? It could, but business is not roulette. As close as possible, business wants to KNOW what is going to happen. In the present environment Fitch has decided the future is unusually uncertain.
    Persons buying stock in Japanese companies based on Trump’s latest are playing roulette.

  4. Maximus Minimus says:

    Trump slogan: both guns and butter.
    My modest proposal; have the Japanese build and operate the trains.

    BTW, I am so misinformed: did not even know the Shinkansen was magnetic levitation technology.

    • Wolf Richter says:

      The Shinkansen is not maglev. It’s classic steel wheels on steel rails. But the Japanese are trying to build a maglev system between NY and DC.

      • Meme Imfurst says:

        Maglev has been proposed since the early 1970’s. Perhaps with modern computer assist the dog-gone thing can stay on the fly-way. No easy task keeping magnetic fields in balance…take two magnets and have some fun trying.

        Still, the amount of power to keep a train magnetically aloft is enormous.

  5. Kasadour says:

    the money should be put aside to repair California infrastructure (Oroville Dam) than to build a high speed train that nobody wants.

  6. Chris from Dallas says:

    The DFW to Houston high speed rail line just cleared a major hurdle last week here in Texas.

    Basically several counties are now willing to use eminent domain so the private railroad can buy properties to run through their counties.

    I repeat, here in Texas it is a PRIVATE COMPANY building the high speed rail line, IN A LOW REGULATION STATE. Even starting years later than California, want to bet on which rail line gets done first?

    As far as cleanliness, we already have a high end, express bus service (Vonlane), that charges less than the airlines but 2-4 times more than Greyhound.

    They have extremely comfortable, better than first class seating, Wi-Fi and basically only take about an hour more than flying (when you compare all the parking, check in, security, waiting, flying time, walking back out the terminal, travel to the car rental, etc.).

    So instead of hurry up and wait, with a lot of unproductive time, I find that I get a good 4 hours of work done.

    If there was a train that could give the same experience and get there in an hour and a half, I and a lot of people, would make many more trips for both business and to see family.

    Finally, I know it is so non-PC, but I have to mention that each Vonlane bus has a really friendly stewardess and unlimited free snacks and non-alcoholic drinks.

    What a throwback to the good old days of aviation.

    • Robert says:

      The proposed DFW to Houston high speed rail is a joke. It does not connect city center to city center, and, ending miles away from downtown Houston, means travelers with baggage would have to disembark, pick up their bags, transfer to a bus and then ride downtown. A big hassle.

    • Kent says:

      The hard lifting in any of these efforts is the government’s part: the use of eminent domain. There are endless lawsuits over land valuation. And political kick back as wealthy landowners decide to fund your opponents campaign.

    • smingles says:

      “I repeat, here in Texas it is a PRIVATE COMPANY building the high speed rail line, IN A LOW REGULATION STATE.”

      “Basically several counties are now willing to use eminent domain so the private railroad can buy properties to run through their counties.”

      Really, that’s what you call low regulation? Forcing people off their properties so that private companies can profit?

  7. Patrick says:

    I had the pleasure of meeting Robert Salter, Rand Corporation, many years ago. His brilliant idea was to construct Vactrain (or vacuum tube train) from NYC to LA (and beyond) to cross the nation at speeds of 6,400–8,000 km/h. The Shinkansen is a fast but doesn’t compare to Vactrain (unproven) technology. Additionally, because Vactrain is underground there is no need to acquire costly property along the route. Also tunneling technology has come a long way in the last twenty years (no pun intended). Go here for further reading,

  8. Felix_47 says:

    NotSoSure hit it on the head. Demographics affect train ridership. We are seeing this in Germany. None of my relatives will travel on the train any more. The massive demographic shift has caused the people I know to spend more time on the autobahn in their SUVs. No matter how good the trains are will the average American middle class woman want to wait with her kids in Union Station in LA after taking a bus in from Claremont? We already see it in the schools. The parents all drive the kids to school and the days of walking or taking the bike are over. Japan can do it because they are a homogeneous society……I wonder what Japan would be like if they absorbed a million young male migrants and another 300,000 per year for twenty years…..

    • Wolf Richter says:

      The trains running between Washington DC and New York are packed! I used them many times. Not the greatest trains in the world, but fast enough, and the fastest way to get from Manhattan to central DC, and vice versa. The ICE trains I took in Germany were pretty full too, as were the TGVs in France and other trains in Europe. I have no idea where you get your theory about trains, except from your own imagination.

      • TJ Martin says:

        Amen to that ! Fact is the one thing the wife and I miss the most every time we return from Europe [ CH ] is the convenience of the trains negating the need for a car unless heading out into the countryside or just for the occasional pure pleasure of driving . Fact is we despite having an ok albeit low speed system here in Denver constantly bemoan the fact that the American railway system was torn apart by Big Oil , Automotive and tire manufactures necessitating the use of a car on a constant basis

        So to Felix and NotSoSure I’d ask the same question . In what alternative reality are both of you living in pray tell ?

    • Petunia says:

      I rode the subway to junior high school in NYC when I was 12. Now in America, they will send the child protective services to your home if you let your child wait for the school bus alone at the corner. This is why kids get driven to school. Welcome to the nanny state.

      • Ivy says:

        One side-effect of driving kids to school is the extra pollution from idling vehicles. Parents line up in SUVs with one kid in the back, and wait 5-10 minutes or longer to drop off, then repeat that at the end of the day. Smart parents turn off the ignition during that dead time, smarter parents work out carpooling and still smarter parents work out walking to school (with a chaperone as needed for safety and to avoid those protective services problems, while burning calories and toning muscles). Imagine, what a revolutionary idea!

      • Dan Romig says:

        My mom grew up in West Orange NJ, and she’d take a trolley and subway, by herself, at age eight, to go to Manhattan for the Sunday Met Opera occasionally. But that was in 1941.

        With a shot-out to Senator Cory Booker, one of mom’s favorite sayings, “Newark was a nice town before the war.”

        Petunia, you’re spot on about the state of affairs with parents/kids today.

        It’s been awhile since I’ve traveled through Europe, but taking a train is the way to go. My home is just a three to four minute walk from a Minneapolis light-rail station between downtown and the airport, and it’s damn convenient to have it as an option. It would be nice to have a fast train between MPLS, Rochester, Madison and Chicago, eh?

  9. disc_writes says:

    Americans, you need to repair what you already have, not spend money you do not have on some new shiny toy.

    That applies to most other countries as well, of course, but if you really want to make America great again, you need to start from maintenance.

    An American fast train will quickly become a money sink like Amtrak anyway.

    • Wolf Richter says:

      Amtrak’s NY City-DC line is highly profitable with big ridership. What’s not profitable at Amtrak are the cross-country trains (slow but great for tourists wanting to see the country) and some other lines.

      • Kent says:

        Years ago I looked into taking an Amtrak train from Orlando to DC just to do something different. But the price was astronomical. Over double the cost of airfare with an 18 hour commute (longer than driving).

        Not understanding why this should be I did some research. Take this with a grain of salt because the research isn’t guaranteed accurate. But Amtrak has to lease most of its lines from private railroads who apply top dollar rates and prioritize their own traffic. I also noticed that Amtrak has about 20 vice presidents, so they seem to be wildly bloated.

        The difference between the US and Europe is that most European tracks are owned by the government and leased to private companies. In the US its the opposite. The tracks in the US are built for hauling goods, not people, and would have to be upgraded significantly for higher levels of safety and comfort.

      • Mike B says:


        Yes, the NE corridor Amtrack / Acella, MARC commuter rail is profitable but that doesn’t mean that it doesn’t have a LOT of problems. As a commuter from Baltimore to DC every day my biggest pet peeve is the decrepit tunnel into downtown Baltimore. This tunnel was dug in the 1880’s and was inadequate from the get go, too narrow, too low, too leaky, too many tight turns and too steep a grade. This has been a problem that has been recognized for more than a century and a replacement tunnel has been “studied” for literally decades but NOTHING but the bare minimum maintenance is ever actually DONE about it. This is the problem with American rail infrastructure in a nutshell and the poster child of the inherent decay and incompetence of it’s administration. Until and unless that changes (and I’m not holding my breath) nothing will change.

        “High speed rail” in this country is just sound bite masturbation. I’ll settle for normal speed rail that actually works.

        • NotSoSure says:

          Not only high speed trains, it’s even true for other “techs” such as military hardware. Here’s the difference between Russian and US military tech. The Russians follow an iterative approach where they continuously refine existing technology and make small/measureable improvements (ironically, this is the approach of US tech companies), while the US continuously try to make Star Wars leaps. No wonder the powers that be are so concerned with Russia. Their tech just works as demonstrated in Syria. The US though has some advances but mostly in balooning the budget deficits

    • Wolfbay says:

      I agree. 20 trillion federal debt,50 trillion private and corporate debt,100 trillion unfounded liabilities, massive state,municipal and pension debt. Maybe Dick Cheney is right that deficits don’t matter but I doubt it. At some point debt matters. How about maintaining and improving our 80 mph trains instead?

    • Tony Dryer says:

      The Amtrak Cascade line between Portland, OR and Seattle, WA is also profitable.

  10. patrick k says:

    Yes, yes, let’s build trains no one will ride. Inmates are running the asylum at the dawn of self driving cars.

    • SnowieGeorgie says:

      Self-driving cars are a dream ( actually a nightmare ) that will never be realized beyond some narrow niche applications. Jut like the flying ( Uber-like ? ) cares that some nitwit billionaire is theorizing.

      I could give a dozen reasons, but I’ll list only two right now :

      (1) Self-driving cars are necessarily wireless and will be hacked. easily and quickly. Just look at any system anywhere in the world to understand that hackers succeed where-ever they apply resources.

      (2) Ignoring an EMP or massive coronal ejection for the moment, it would be so easy and inexpensive to jam wireless command and control signals to driverless cars — and cause all kinds of mayhem death and destruction on the roads.

      Don’t mock me until you research this.

      I have always wanted to buy a cell-phone jammer to ensure a decent meal at a fine restaurant.

      I did look into a pocket-sized jammer long ago, but did not get one. One reason I have never chosen to spend the several hundreds of $$$$ to get a jammer is because there were always more shiny eagles to buy.

      They will jam the driverless cares because they can. And watch the demolition derby from a safe overpass or overlook. Or maybe from their flying car, LOL.


      • david says:

        They also rely on the sensors. We have already seen an accident because a truck passed that was the same color as the sky. What happens when they ice over or take a big bug splat, or even a bird strike? Or the road snows/rains over to where you can’t differentiate the lines? I think they will cause problems.

  11. Kent says:

    In Florida, the State, along with some private sector companies, are trying to build a high-speed railway from Orlando to Miami. They want to use existing rail down the eastern seaboard. Every County along the way is opposed. Problem is the track was laid down in the 40’s and 50’s. In those days, that was the far western side of town. Nowadays it runs right through the middle. Nobody wants long passenger trains stopping traffic multiple times of day.

    Not to mention it is a boondoggle. Miami and Orlando attract very different crowds.

    • Petunia says:

      In Florida the rail lines are already there, all they have to do is elevate the new commuter system over existing track. This is very necessary because I lived through 5 hurricanes in Florida and found out the hard way that evacuation is not possible.

      • Meme Imfurst says:

        Monorail….how much easier could it be. Let the cows graze below, grow sugar cane, etc. Small foot print, no traffic, high speed, doesn’t jump the track, kids can’t play on the rails, cars don’t get stuck on the tracks, build it right on top of the median running down the road.

        Should have built one to Key West from Miami.

  12. Petunia says:

    I lived in northeast Pennsylvania for some years and they had a NY to NE PA rail line on the drawing board since the 70’s. They finally were able to allocate the land about 10-15 years ago and then the fun started. Every town in New Jersey that didn’t want the train through their town now insisted on having a station in their town. The costs went up and the advantages went down and the train never got built.
    Although Pennsylvania and New York wanted the train, Gov. Christie killed it in New Jersey.

    • r cohn says:

      If almost all of the benefits of such a train line would have accrued to residents of Pa and NY,why should elected officials from NJ have approved such a project

      • Petunia says:

        New Jersey would have benefited from the train by unclogging their highways and bridges. The train was a way to bypass the northern part of the state which is extremely congested. It would have improved the quality of life there considerably. They would have also gained at least one station up north leading straight into NYC.

  13. michael says:

    Giving money to California would be lost on cronies and unions. Trump is no friend to the Democratic Run California. Expect him to cut funding for everything. He has already clearly stated his position so speculation otherwise is nonsense.

  14. r cohn says:

    Another one of the Donald’s silly ideas.
    Two reasons for this
    1.Cost-Every single new infrastruture project ends up costing multiple times the original estimates.Currently deficits are running wild at both the Federal and state level.We need to focus on necessary repairs and replacement of current infrastructure
    2.Use of foreign corporations /workers.The goods trade deficit with China was almost 350B in 2016 and almost 70b with Japan in 2016.If the Donald can not significantly reduce these numbers his Presidency is a complete failure

  15. Tom Kauser says:

    What would buffet do?
    Warren owns the rails that run coal down to the coast along the front range Colorado.
    The president is well aware that rail has turned down and the press needs an “America is far behind story” to get the hate juices flowing!
    The go to point man on rail especially new lines is first Omaha and than London?
    The rail is ordered in London! Shipped out of China?

  16. Tom Kauser says:

    Debt matters like population matters?
    By the time its realized ……

  17. JB says:

    Build a high speed rail system in the US?! Why we can’t build a oil pipeline with private money. Look at the rebuild of the world trade center. Mired in cost overruns and political brinkmanship. The united states abandoned passenger rail travel in favor of autos and planes. Much of railroad right of way has been (not sure either donated or sold) to the public domain . I can bike 46 miles from lacochee to dunnellon florida on repaved rail bed. there are many more rail to trails systems. SO my friends we lost/re purposed much of our rail system . I think a more prudent approach is to reduce the need/cost to travel by supporting zoning policies where work/home/leisure activities
    are proximate to each other. Florida is one big spread out strip mall (right petunia?)that requires a car.

  18. david says:

    That mother-in-law doll art is crazy good!

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