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CNN reported on Wednesday that unless a potential freight rail strike due to failed labor negotiations is averted, this could cost the US economy up to $1 billion in the first week of the strike.

According to a new analysis from the Anderson Economic Group (AEG), the initial three days of a possible strike could cost at least $250 million.

"Economic impacts caused by a national railroad strike include lost wages for the industry’s workers and production slowdowns due to non-delivery of critical components in some vulnerable industries," the AEG analysis said as quoted in the report.  

Some crucial industries that are likely to be impacted by such an event include ethanol, retail, and agriculture.

Rail unions have scheduled to begin a strike on December 9 if a deal is not reached on a new contract that will show an increase in rates of pay and benefits.  

The Biden administration has already stated it is directly engaged with parties in the negotiations.

REPORTER: "Can you tell us how the president's been involved" in rail strike discussions?

KJP: "This is the third time I'm saying he's been directly involved...I'm not gonna provide any details at this time." pic.twitter.com/ddT8Ae1SQI

— Townhall.com (@townhallcom) November 22, 2022

Two months ago, the two largest rail unions, SMART Transportation Division and the Brotherhood of Locomotive Engineers and Trainmen, to Washington to negotiate fair work conditions with the railroad companies.

After a series of talks and negotiations with the mediation of Labor Secretary Marty Walsh, parties concluded a deal that the union leaders thought would be unanimously accepted.

The deal offered a 24% raise over a period of 5 years, as well as additional personal days and caps on health care costs.

It also includes changes to some strict attendance policies and provides workers with more freedom to attend to their medical needs without facing penalties. 

Although the deal was described as a win for all sides by President Biden, when it came to voting on the contract, only the Brotherhood of Locomotive Engineers and Trainmen, representing roughly 23,000 workers, voted to ratify the deal with 53.5% of the vote.

But SMART Transportation Division, representing 28,000 conductors, brakemen, yardmen, and others, rejected the agreement, with 50.87% voting no.

"SMART-TD members with their votes have spoken, it's now back to the bargaining table for our operating craft members," said SMART-TD President Jeremy Ferguson in a statement. "This can all be settled through negotiations and without a strike. A settlement would be in the best interests of the workers, the railroads, shippers, and the American people."

Read more: Air France employees threaten strike during Christmas - Reports