U.S. Travel Industry Faces Billions in Losses For Trump’s Policies and Tariffs? What you need to know?

Monday, March 17, 2025

The U.S. travel industry is bracing for significant losses as international tourists reconsider their plans amid President Donald Trump’s trade policies, diplomatic tensions, and controversial rhetoric. A new report by Tourism Economics predicts that international travel to the U.S. will decline by 5% in 2025, contributing to a projected $64 billion loss in travel spending.

According to preliminary data from the U.S. Department of Commerce’s National Travel and Tourism Office (NTTO), inbound travel to the U.S. dipped by 2% in February 2025 compared to the previous year.

A combination of economic factors, geopolitical concerns, and travel sentiment is driving the decline, particularly among visitors from Canada and Western Europe, two of the country’s most significant international travel markets.

Canadian Tourists Cancel U.S. Travel Plans

Canada, which has historically been the largest source of international visitors to the U.S., has seen a sharp drop in cross-border travel.

Statistics Canada reports that visits by car from Canada to the U.S. fell by 23% in February, while U.S. car trips to Canada declined by 7.9% over the same period.

The downturn comes as Trump has renewed calls for Canada to become the 51st U.S. state, a statement that has sparked outrage north of the border.

In response, former Prime Minister Justin Trudeau encouraged Canadians to spend their travel dollars domestically, promoting Canada’s national parks, historic sites, and tourism destinations instead.

Western Europe Travel Declines Amid Trade War and Policy Shifts

The European travel market, which accounted for 37% of overseas visitors to the U.S. in 2024, is also showing signs of weakening demand.

• Travel from Western Europe fell by 1% in February
• Visits from Denmark dropped by 6% compared to the same period last year

Tensions between the U.S. and the European Union (EU) escalated after Trump threatened a 200% tariff on alcoholic beverages imported from the EU, calling it “one of the most hostile and abusive taxing and tariffing authorities in the world.”

The U.S. Travel Association, which represents the nation’s tourism industry, warned that Trump’s trade policies and diplomatic stance could continue to suppress visitor numbers, affecting hotels, airlines, restaurants, and national parks.

German Tourists Reroute to Canada

For some travelers, Trump’s policies have made the U.S. a less attractive destination. Jens Muellers, a German tourist who has visited the U.S. four times, decided to cancel his upcoming summer trip to Seattle in favor of Canada.

Future Outlook for U.S. Tourism

The U.S. Bureau of Economic Analysis (BEA) has long recognized tourism as a major driver of economic growth, contributing over $1.9 trillion to the economy annually.

However, if the current downward trend continues, the industry could suffer severe revenue losses—a concern for businesses reliant on international travelers.

With political uncertainty, shifting global alliances, and economic turbulence, travelers are reconsidering the United States as a preferred destination, opting instead for Canada, Europe, and other politically stable regions.