OTTAWA, Aug 17 (Reuters) - Canadian Pacific Kansas City ( CP )

said on Saturday it would halt any new rail shipments

originating in Canada, and all new U.S. shipments destined for

Canada starting on Tuesday if talks with its Canadian labour

union fail to progress.

North American industry groups and shippers are bracing for

an unprecedented simultaneous stoppage at both of Canada's main

railway companies that could disrupt the movement of commodities

such as coal, potash, crude oil and grains, and manufactured

goods ranging from cars to chemicals.

The Teamsters union's talks with Canadian National Railway ( CNI )

and CPKC have deadlocked, and the rail companies say

they will start locking out workers on Aug. 22 if they cannot

reach a labour deal. The union says it is ready to call a strike

for that date.

In an update on Saturday, CPKC said it was taking "prudent

steps to prepare for a potential rail service interruption next

week." It said bargaining talks are scheduled to continue on

Sunday.

Earlier this week, CPKC had already begun to halt any new

shipments of hazardous chemicals or dangerous goods.

Separately, CN Rail said on Friday "there has been no

meaningful progress at the bargaining table," and added that it

had also begun a phased and progressive shutdown of its network.

CN Rail said this will culminate in a lockout, unless a deal

is reached, or binding arbitration is imposed.

Earlier this week, Canada's Labour Minister Steven MacKinnon

rejected an appeal from CN Rail to initiate binding arbitration

between the two sides, and called on the company and the unions

to negotiate in good faith.

Industry groups warn that a simultaneous work stoppages at

both rail companies could inflict billions of dollars' worth of

economic damage.

It could also impact trade with both the U.S. and Mexico.

The CN and CPKC networks connect key U.S. rail and shipping hubs

such as Chicago, New Orleans, Minneapolis and Memphis. CPKC's

network also extends further south to ports on Mexico's east and

west coasts.