U.S. President Donald Trump has paused implementing tariffs on Canadian goods, but U.S. and Canadian travel industry groups say there’s still plenty to worry about.
After two telephone meetings on 03FEB between Trump and Canadian Prime Minister Justin Trudeau, the White House said the proposed 25% tariff on most Canadian goods entering the U.S. would not be implemented on 04FEB but would instead be put on pause for 30 days.
It’s a major step but it doesn’t erase concerns about a severe drop in Canadian travel to the U.S., and doesn’t necessarily reduce anxiety about the impact on Canadian travel advisors.
Some economists believe a sustained trade war could also further weaken the Canadian dollar, making trips to the U.S. more expensive for Canadians. In fact, on 03FEB, the loonie fell to its lowest level in more than two decades.
US TRAVEL ASSOCIATION WARNING
Just prior to the announced pause, the U.S. Travel Association put out a statement that said new tariffs on Canada could mean the loss of more than 2 billion in spending and thousands of jobs.
The USTA noted that Canada is the top source of international visitors to the U.S. with 20.4 million visits in 2024, generating $20.5 billion in spending and supporting 140,000 American jobs.
“A 10% reduction in Canadian travel could mean 2.0 million fewer visits, $2.1 billion in lost spending and 14,000 job losses,” officials stated.
The five most visited states by Canadians—Florida, California, Nevada, New York and Texas—could see declines in retail and hospitality revenue, the USTA said.
CANCELLATIONS ALREADY HAPPENING
Flight Centre Travel Group in Canada on 03FEB advised Open Jaw that the combination of tough tariff talk and a weak Canadian dollar has sparked a major shift in behaviour and preferences from both leisure and corporate travellers.
“Already, Flight Centre experts have helped several Canadians pivot away from their U.S. vacations and rebook elsewhere, including bucket-list and milestone experiences valued between CAD$10,000-20,000. There has been a surge of customers at our locations seeking advice from our travel experts to re-plan their existing bookings.
“For example, one of our long-time customers cancelled a trip to Arizona over the weekend and now plans to bring her family to Portugal instead.”
Flight Centre said cruises are also being affected.
“Despite sailing in international waters, several travellers are amending itineraries because some ports of call are U.S.-based. Antigua, the Caribbean, and Portugal, among other destinations, have also seen increased interest as more travellers look to maximize value despite economic challenges.
“Business travel trends are changing too,” the company said. “A recent Corporate Traveller survey conducted by YouGov reveals 85% of Canadian SMEs plan to reduce U.S. travel, with 40% already making cuts. Additionally, 77% are exploring new markets, signalling a potential shift in North American business dynamics in the short term.”
VISIT FLORIDA NOT RUFFLED
Speaking at a press conference held by Visit Florida at their Florida Huddle tourism event in Ocala, Visit Florida President and CEO Dana Young said she doesn’t have any data on the impact tariffs might have on Florida visitor numbers.
“What I can tell you is that we have had over the years political things that have happened; travel bans and boycotts and things of that nature, and we have not seen any meaningful impact on our visitation numbers,” she said in response to a question from Open Jaw. “And, so, it is our hope that we will continue seeing interest from Canada and Mexico and Panama and other countries. People love Florida.”
ACTA, CATO ISSUE WARNINGS
As reported by Open Jaw, ACTA this week stated that a 25% tariff could severely impact Canadian advisors. ACTA president Wendy Paradis said the Canadian government must step up with measures to support affected industries, including travel agencies and travel advisors.
The Canadian Association of Tour Operators, CATO, put out a statement on 03FEB saying it “strongly condemns” the tariffs proposed by the Trump administration.
“These tariffs will cause significant harm to our economy, leading to job losses, increased costs for goods, and reduced discretionary spending for consumers on both sides of the border,” CATO said.
Prime Minister Justin Trudeau on the weekend suggested Canadians stay home for their holidays.
“Now is also the time to choose Canada,” he said in a televised address to the nation.
