In recent years, the U.S. has run a trade deficit, but that hasn’t led to an economic crisis of any sort, because the trade deficit has been offset by foreign investment in America, enabling Americans to consume more goods than we send to foreigners, year after year. Overseas tourists also help offset trade deficits by bringing money into the U.S.. But tourism is down, due in part to President Trump angering people in other countries, by imposing tariffs on their countries, detaining people who legally came to the U.S., and talking about annexing Canada and Greenland. This may increase America’s current account deficit by $50 billion.
“Canadians are avoiding the U.S. over Trump’s bluster and border arrests—crossings down 22% Trump’s attacks on Canada’s economy and threats to make it the 51st state have infuriated Canadians, who are canceling trips to the U.S. in big numbers,” notes Crystal Ball Markets.
“Public data shows a 9.4% drop in US tourism in 2025 due to tariffs on Canada/Europe, cutting visits (e.g., Canadian land crossings down 31.9%), anti-US sentiment from ‘America First’ rhetoric, sparking boycotts,” says Grok.
Quartz reports:
The travel and tourism industry, which accounts for about 3% of the U.S. GDP, has long been one of the economy’s most robust sectors, particularly when it comes to trade: The U.S. had posted a trade surplus in travel every year this century. Until this year.
A drop in foreign visitors to the U.S. caused the real value of exports of travel services to fall at a 7.8% annual rate in the first quarter, according to the GDP report released Wednesday. The U.S. Travel Association says the United States is now running an annual travel trade deficit of $50 billion, compared with a $3.5 billion surplus in 2022.
“This presumably reflects increased hostility by many foreigners to the U.S., as well as fear of harassment by ICE officers,” Dean Baker, senior economist for the Center for Economic and Policy Research, wrote in his note reviewing the first quarter GDP numbers. “We will likely see further declines in future quarters, especially among students coming to study in the United States.”
There has already been an 11% year-over-year decline in enrollment of foreign students between this March and last, according to the Institute of Educational Enrollment. The organization expects the drop to result in a loss of up to $4 billion in spending.
Other data bears out the dour outlook for travel. The International Trade Association reported earlier this month that arrivals of non-citizens to the United States by plane declined by more than 11% since March 2024. Tourism Economics, a firm that tracks the hospitality industry, recently changed its forecast for foreign visitors to the U.S. to a 9.4% decline for the year, after projecting a 9% increase back in December….“Trump’s policies and pronouncements have produced a negative sentiment shift toward the U.S. among international travelers,” the firm said.
U.S. airlines are feeling the pain. Several recently changed their projections for the full year as tariffs, inflation, and shaky consumer demand forced a re-evaluation of 2025 expectations. The Dow Jones Airlines Index is off 30.17% year to date and the DJ Hotels Index has declined 14.12%, with both hitting 52-week lows on April 8.
Harsh treatment of certain foreign tourists and visitors has created bad press overseas, contributing to less tourist visits to the U.S. The Associated Press reports that
A German man says he’s grateful to be back home in Europe after being arrested by ICE and forced to spend over two weeks at an immigration detention center near the San Diego border.
Lucas Sielaff, 25, said U.S. Customs and Border Protection (CBP) officers put him and his American fiancée in handcuffs after they tried to enter the San Diego-Mexico border from Tijuana last month.
“They accused me [of living] in America instead of visiting, but there was no proof that I overstayed anything,” Sielaff said in an interview with Team 10 Thursday from Germany.
Sielaff has been in a long-distance relationship with Las Vegas psychologist Dr. Lennon Tyler since 2022, when the two met overseas in Prague.
She told Team 10 her fiancé has come to the U.S. before without issue and always returned to Germany to comply with his visa.
Quartz notes that “Since President Donald Trump took office, there have been other incidents of tourists like Sielaff being stopped at U.S. border crossings and held for weeks at U.S. immigration detention facilities before being allowed to fly home at their own expense. They include another German tourist who was stopped at the Tijuana crossing on Jan. 25. Jessica Brösche spent over six weeks locked up, including over a week in solitary confinement, a friend said.”
The Trump administration has also created bad press overseas by detaining foreign students at American universities for taking stances perceived as being at odds with U.S. foreign policy. ICE arrested and detained a PhD student at Tufts University, Rümeysa Öztürk, “not because the government claims she committed a crime or other deportable offense, but for the seemingly sole reason that her expression — an op-ed in a student newspaper” — was viewed by the Secretary of State as being at odds with U.S. foreign policy. (Her op-ed criticized Tuft’s administration for dismissing student government resolutions about supposed violations of international law in Palestine). For ICE to detain a student who is in the country legally on a student visa, because of an op-ed, is an affront to the First Amendment, and the fact that “Freedom of speech and of the press is accorded aliens residing in this country.” (See Bridges v. Wixon (1945)).
Canadians are boycotting the United States and avoiding traveling to the United States after President Donald Trump called for Canada to become America’s 51st state and imposed tariffs on Canada. That will cost the U.S. billions of dollars.
“Trips from Canada to the U.S. are dropping, threatening to widen the United States’ $50 billion travel and tourism deficit,” reports CNBC. “Canada is the top source of international visitors to the United States. The White House said” in March “that Canadians ‘will no longer have to endure the inconveniences of international travel when Canada becomes our 51st state.’”
The Detroit Free Press reported that “Michigan and other U.S. states are seeing fewer Canadian visitors as international tourism declines. The downturn unfolds alongside President Donald Trump’s remarks about Canada becoming the 51st state,” and “escalating tariffs….Future flight booking data for passenger trips from Canada to U.S. has plummeted by nearly three-quarters compared with the same time period last year, according to OAG, an aviation analytics firm.”
That is likely to wipe out tens of thousands of jobs. Even a modest 10% drop in tourists from Canada would “result in 14,000 job losses” in the U.S., according to the U.S. Travel Association.” The drop in tourists is likely to be far more than 10%, judging from future flight booking data, which was down nearly 75% in March.
CNBC adds:
Canadians are skipping trips to the U.S. and visitors from other countries could soon follow threatening to deepen the United States’ $50 billion travel deficit. Experts say they’re pulling back for a variety of reasons, [such as] President Donald Trump’s trade policies and his public statements on annexing Canada….
Reached for comment Friday, a White House spokesperson said by email that “everybody wants to come to President Trump’s America.”
Canadians “will no longer have to endure the inconveniences of international travel when Canada becomes our 51st state” and that “Europeans are eager to enjoy the Golden Age of America if they so choose to,” the spokesperson said.
In response to President Trump’s tariff plans at the time, former Canadian Prime Minister Justin Trudeau last month urged Canadians to “choose Canada” and suggested “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.”..
Hotel demand in some area along the Canada-U.S. border are also down. As of March 15, they were off 8% in Bellingham, Washington.
The Detroit Free Press reported that tourism from Canada was already down in February, but was likely to fall much more in the future. “In February, Canadian residents made roughly 1.2 million return trips from the U.S. by car, a 23% drop compared with the year before. Forecasts call for even sharper declines in air travel between Canada and the U.S. this summer. Canadian residents flew back from 585,700 trips to the U.S. ” in February, “a 13% decline compared with February 2024. Future flight booking data for passenger trips from Canada to U.S. has plummeted by nearly three-quarters compared with the same time period last year.”
