By Eleni Alexaki
The threat of high tariffs by US President Donald Trump, which is currently on hold, will act as a barrier to Canadian travel to the US, causing a significant loss of over $2 billion in spending to the US tourism industry.
The imposition of 25% tariffs on imported Canadian and Mexican products was postponed for 30 days less than 24 hours before they were due to come into force after last-minute talks.
The newly elected US president backed down after both neighbouring countries agreed on tighter border security to tackle illegal immigration and tougher measures to crack down on drug trafficking.
However, it remains unclear whether Trump will follow through on his threats to Canada and Mexico once the 30-day deadline expires.
The American Travel Association has warned that the Trump administration’s tariffs on Canada could affect Canadians’ visits and spending in the United States, causing a 10% reduction in Canadian travel to the US, leading to two million fewer visits, $2.1 billion in lost spending and 14,000 job losses.
On 1 February, the US president signed an executive order announcing 25% tariffs on most goods from Canada, with oil, gas and electricity taxed at a rate of 10%.
In response, Canadian Prime Minister Justin Trudeau imposed 25 % tariffs on US goods, which include dairy products from Wisconsin, oranges from Florida and bourbon from Kentucky.
Mr. Trudeau also urged Canadians to travel and spend their dollars domestically, effectively boycotting U.S. goods, services and destinations: “Now is the time to choose Canada… This may mean changing your summer vacation plans to stay here in Canada and explore the many national and regional parks, historic sites and tourist destinations that our great country has to offer.”
Canada is a huge international inbound tourism market for the United States travel industry, with 20.4 million visitors generating $20.5 billion in spending in 2024 and supporting 14,000 American jobs.
Canadians typically visit Florida, California, Nevada, Nevada, New York and Texas, and it is these destinations that will see the largest reductions in revenue should Canadians join Trudeau’s boycott of U.S. destinations.
Trump’s trade war has begun, and the U.S. travel and tourism industry will not be unaffected.
