US Tariffs on Canada May Harm Tourism, Lead To Job Losses

After returning to the White House as the new President of the United States late last month, Donald Trump has been busy with work. Signing pardons and proposing the implementation of tariffs were only a small portion of the new President’s busy schedule.

Trump proposed the implementation of tariffs on Canada, Mexico, as well as China. While the tariffs for China were implemented, the US President backed off from the proposed 25% tariffs for Canada and Mexico.

Tariffs Are Harmful for Tourism

Despite Trump’s decision to halt the tariffs for Canada and Mexico, the national non-profit organization representing and advocating for the travel industry, the US Travel Association, warned that tariffs may lead to a potential decrease in the number of Canadians traveling to the US. On Monday, the Association warned that a decline in traveling from Canada may ultimately affect the hospitality sector across the United States.

The travel industry body reminded the words of Canadian Prime Minister Justin Trudeau, who encouraged fellow Canadians to keep their spending domestically. “Now is the time to choose Canada…It might mean changing your summer vacation plans to stay here in Canada and explore the many national and provincial parks, historical sites and tourist destinations our great country has to offer,” the Prime Minister said.

According to the Association, a potential decrease in visitation from Canadians may affect several important tourist hubs. Those are New York, Nevada, California, Texas and Florida, locations most frequently visited by Canadians. If that happens, a notable decrease in hospitality, retail and shopping revenue may be observed.

Hospitality, Entertainment and Retail Industries May Lose Valuable Revenue

As noted, per the Association’s report, Nevada may be affected by a potential decline in traveling. This can be interpreted as a decrease in visitation to Las Vegas too. Traveling and spending on tourism by visitors from Canada generates valuable revenue for the United States.

An estimate by the Association reveals that Canada is the country’s top source of international visitors. It pointed to data showing that in 2024, an estimated 20.4 million Canadians visited the US, helping support some 140,000 American jobs and generating $20.5 billion.

If that statistic was to go through changes with say a 10% decrease, the Association calculates that approximately 2 million fewer Canadians would visit the US. The economic impact of such a decline translates to $2.1 billion lost in spending on hospitality, retail, shopping and entertainment, which may result in 14,000 job cuts.