Industry News
Summer has officially begun, meaning many people will be traveling and going on vacations. Tourism generates billions of dollars annually in the United States and is vital to communities and small businesses. This is when these businesses are gearing up for their busy season. It is a short and crucial time when these businesses make enough money to make it through the year.
However, President Trump’s tariffs have raised questions about the outlook for many U.S. businesses that rely heavily on international tourism revenue. According to the World Travel & Tourism Council, international visitor spending in the U.S. generated $181 billion last year and is projected to drop to $169 billion this year. Losing approximately $12 billion in revenue could have a devastating economic impact on these communities and small businesses. One country may not be losing revenue due to the tariffs; instead, it is projected to profit from them.
Canada and the United States have been formal allies since 1949, when both signed the North Atlantic Pact. In truth, the two countries have been friends for much longer than that, although having occasional disagreements and controversies, the unwritten alliance which preceded formal ties has endured because it is based on deep-rooted common interests. Unfortunately, due to statements made by President Trump regarding making Canada the 51st state and implementing tariffs, this friendship is being tested, especially when it comes to where Canadians choose to spend their money.
CBC News reported that Canadians spent $26.6 billion on tourism in the U.S. in 2023, compared to the $12.9 billion Americans spent in Canada. In an online poll conducted by the Canadian Polling Company of 1,600 residents, six out of 10 said they would travel less in the U.S. within the next year due to tariffs, the trade war, and thoughts that Canada should be the 51st state. According to the Conference Board of Canada, transferring all their U.S. travel dollars to Canada would increase Canadian tourism by $8.8 billion. The Conference Board said the weak Canadian dollar and the recent aggressive stance from the U.S. toward Canada have led to a shift in Canadians’ intentions to travel and spend in the U.S.
According to the Canadian Press, Nova Scotia Premier Tim Houston said everyone is trying to deal with a situation that was “thrust” upon them. “Nobody here created this situation…this divide between our countries,” he said. “And Canadians, you know when they hear the talk of the 51st state stuff, we’re pretty ticked off about that. It kind of makes us really, really upset,” Houston told the Canadian Press.
According to Statistics Canada, preliminary cross-border travel data show that Canadian-resident return trips by automobile from the United States have fallen sharply since the start of the year, with five consecutive months of steep year-over-year declines. In May, the data reported that return trips by automobile declined by 38.1% on a year-over-year basis, dropping further below the 35.2% decline recorded in April. This trend of declines marked the first time since COVID-19 restrictions were still in place.
The U.S. Travel Association, a non-profit organization representing the travel industry, said Canadians are the top international visitors to the United States, with more than 20 million visits last year. It said a 10 percent reduction in Canadian travel could mean two million fewer visits, $2.1 billion in lost spending, and 14,000 job losses. Vermont is one of those states bracing for the effects of lower tourism numbers from Canada.
Jay Peak Resort, Vermont, is just a few miles south of the Canadian border and has seen tourism numbers fall. The cancellations started after President Trump talked about Canada becoming America’s “51st state,” Steve Wright, president and general manager of Jay Peak Resort, told CNN. “I think people are maybe ‘under-seeing’ the impacts it’s having on border communities and border economies up here, that rely on Canadians for their top and bottom line,” Wright said. According to him, about 50 percent of Jay Peak’s total customers come from Canada, representing 60 percent of the traffic during the summer. Jay Peak Resort has long offered “at-par” pricing for Canadians, which allows Canadian dollars to pay the USD list price for lift tickets and more, which saves Canadians a lot of money against the strong US dollar.
The decline in Canadian visitors to the U.S. has affected Vermont and other northern states. To address the issue, a delegation of Canadian premiers met with representatives from Connecticut, Maine, New Hampshire, New York, Rhode Island, and Vermont. The meeting discussed how to develop closer ties during the tariffs and trade war between the U.S. and Canada. According to CBC News, border crossings from New Brunswick, Canada, to Maine are down almost 40 percent in recent months. “We don’t like to hear that, but what we want to say to that is, ‘You’ve got to make noise, you’ve got to tell your leader that this is hurting the American economy, this is hurting jobs in the U.S.’ But I can’t tell Canadians to come visit the U.S. right now,” New Brunswick Premier Susan Holt said at a news conference in Boston after the meeting.
The abrupt and steep declines in Canadian residents returning from the United States at the start of 2025 suggest a notable change in tourism and travel patterns. However, whether the change is temporary or part of a more permanent shift is still unclear. The early signs of declining Canadian travel to the United States since President Trump’s trade war began are unclear. Whether it will be a temporary or more permanent reality remains unclear. Whether it is driven by economic strain, political sentiment, or long-term policy shifts also remains uncertain. As the July deadline approaches, the choices made by leaders in Washington and Ottawa will shape not only immediate trade outcomes but also the future of regional cooperation and economic integration.
