Fewer Canadians visiting the U.S. puts billions in tourism at risk
- Paul Aage Hegvik
- Feb 26
- 5 min read
Updated: Mar 14
In early February 2025, escalating political tensions between the United States and Canada have led to a significant decline in Canadian tourism to the U.S., with substantial economic repercussions.
The situation intensified when President Donald Trump imposed a 25% tariff on Canadian goods, prompting a wave of anti-American sentiment among Canadians. In response, many Canadians have canceled trips to the U.S., boycotted American products, and expressed their discontent through various public demonstrations.
20 million tourists in US in 2024
The economic impact of this decline in tourism is considerable. Canada has historically been the top source of international visitors to the United States. In 2023, Canadian visitors made up 31% of all international visitors to the U.S. In 2024, over 20 million Canadian visitors traveled to the U.S., contributing an estimated $20.5 billion in spending. Even a modest 10% reduction in Canadian travel could result in 2 million fewer visits and $2.1 billion in lost revenue. The tourism industry in states like Michigan, which heavily rely on Canadian visitors, is particularly vulnerable.
Even a modest 10% reduction in Canadian travel could result in 2 million fewer visits and $2.1 billion in lost revenue. Doug Ford Fronting protests
The recent tariffs have led to a surge in Canadian patriotism, with initiatives encouraging citizens to support local businesses and avoid American products and destinations. Doug Ford (Premier of Ontario) , head of government for the Canadian province of Ontario, has taken steps to remove American-made liquor from store shelves, emphasizing the importance of supporting Canadian businesses.
Ford announced that the Liquor Control Board of Ontario (LCBO) will cease sales of American alcoholic beverages, removing them from both physical shelves and catalogues, thereby preventing other retailers and restaurants from restocking these items. In a lighthearted retort to Trump's suggestion that Canada should become the 51st U.S. state, Ford quipped: «To the president, I’ll make him a counteroffer; how about if we buy Alaska and throw in Minnesota and Minneapolis at the same time?» This remark underscores the tensions between the two nations while highlighting Canada's resolve to maintain its sovereignty.
«To the president, I’ll make him a counteroffer; how about if we buy Alaska and throw in Minnesota and Minneapolis at the same time?»
Potential long-term consequences
Public sentiment reflects strong opposition to the U.S. tariffs and President Trump's proposals regarding Canada. Many Canadians have altered their shopping habits, boycotted American goods, and canceled travel plans to the U.S. This collective movement underscores the deep-seated economic and cultural ties between the two nations and highlights the potential long-term consequences of the current political rift.
Many Canadians have altered their shopping habits, boycotted American goods, and canceled travel plans to the U.S.
As the situation develops, both economies may face further challenges, emphasizing the need for diplomatic efforts to resolve the trade disputes and restore the historically strong bilateral relationship.
Economic impact of Canadian tourism to the U.S.
2023: Canadian visitors constituted 31% of all international visitors to the U.S.
2024: Over 20 million Canadian visitors contributed an estimated $20.5 billion in spending.
Potential Decline: A 10% reduction in Canadian travel could lead to 2 million fewer visits and $2.1 billion in lost revenue.
These figures highlight the significant economic benefits that Canadian tourists bring to the U.S. economy and the potential losses arising from the current decline in travel.
Prime Minister Justin Trudeau:
Urging citizens to «choose Canada» for their vacation plans
In response to the United States' imposition of a 25% tariff on Canadian goods, Prime Minister Justin Trudeau has taken a firm stance, implementing retaliatory measures and urging Canadians to support domestic industries.
On February 2, 2025, Trudeau announced that Canada would impose 25% tariffs on C$155 billion ($107 billion) worth of U.S. goods. These tariffs are set to take effect in two phases: C$30 billion immediately and the remaining C$125 billion within 21 days. Trudeau emphasized Canada's resolve, stating, «We will not back down.»
Bolstering domestic tourism
Addressing the economic implications, Trudeau highlighted the negative impacts of the U.S. tariffs on both nations and encouraged Canadians to prioritize local products and destinations. According to Politico he urged citizens to «choose Canada» for their vacation plans, a move aimed at bolstering domestic tourism and mitigating the effects of reduced cross-border travel.
Trudeau also expressed concerns over the broader implications of the tariffs, describing them as «entirely unjustified» and affirming Canada's commitment to stand up for its workers and industries. He stated, «We will stand up for Canadian workers. We will stand up for Canadian industries.»
Rallying to support local business
These developments have led to a surge in Canadian nationalism, with citizens and local officials rallying to support domestic businesses and reduce reliance on American products. The situation underscores the deep economic ties between the two countries and the potential long-term consequences of the current trade dispute.
Trump's latest threats to Canada
Trade tariffs: In early 2025, Trump imposed new tariffs on Canadian aluminum, steel, and agricultural products, claiming unfair trade practices. Canada responded with retaliatory tariffs on American goods.
Canadian travel boycott: In reaction to Trump's policies, many Canadians have canceled trips to the U.S., causing a sharp drop in tourism revenue for American border states.
51st state remark: Trump has repeatedly joked—though some say seriously—about Canada becoming the 51st U.S. state, a statement that has sparked outrage among Canadian politicians.
Fentanyl accusations: Trump has falsely claimed that Canada is a major source of fentanyl entering the U.S. However, data shows that the vast majority of illicit fentanyl comes from China and Mexico, not Canada. Trudeau has called these accusations «misleading and irresponsible.»
Oil and energy disputes: Trump has suggested imposing new restrictions on Canadian oil imports, which could threaten the economic stability of Canada’s energy sector.
Border security rhetoric: Trump has hinted at tougher border controls, suggesting Canada’s immigration policies pose a security risk, despite no evidence supporting this claim.
Personal attacks on Trudeau: Trump has ramped up his criticism of Prime Minister Justin Trudeau, calling him «weak» on trade and «too soft» on border security, further straining U.S.-Canada relations.
Air Canada plans to reduce capacity
In response to escalating trade tensions and a weakened Canadian dollar, Air Canada has announced plans to reduce capacity on routes to Florida, Las Vegas, and Arizona starting in March 2025.
Similarly, WestJet is closely monitoring the situation, noting a 25% drop in interest for U.S. travel in recent weeks.
While no immediate capacity reductions have been confirmed, the airline is evaluating its transborder network in light of these developments.
Remains optimistic
Despite these challenges, Air Canada remains optimistic about overall booking trends, anticipating strong yields for the second and third quarters of 2025. The airline is proactively adjusting capacity to align with market demand, reallocating resources to sectors showing strength.
To mitigate financial risks associated with currency fluctuations amid the trade dispute, Air Canada has increased its foreign exchange hedging from 60% to 70% in 2024. This strategic move aims to provide greater financial stability during uncertain economic times.
Monitoring
As the situation evolves, both airlines and travelers are closely monitoring developments, with potential further adjustments to travel plans and operations in the coming months.
