Trip Cancellations Could Cost U.S. $2.1B

February 5, 2025

U.S. tariffs on Canada could drive down the volume of Canadian visitation and tourist spending in the United States, the U.S. Travel Association (USTA) warned Monday.

As reported in Forbes, Canada’s largest travel agency—Flight Centre—has seen a surge of customers canceling U.S. vacations and booking elsewhere. Among the lost trips are “bucket-list and milestone experiences valued at over $10,000 CAD,” the agency confirmed.

Even a 10 percent reduction in Canadian inbound travel could translate to 2 million fewer visits, which would mean $2.1B in lost spending and 140,000 jobs jeopardized in the hospitality and related sectors, according to USTA projections. Canada is the top source of international visitors in the U.S., with 20.4 million trips last year.

The top five most-visited states by Canadians—Florida, California, Nevada, New York and Texas—could see significant declines, according to USTA data.

Other Sectors Hurt by Tariffs

It is feared that hefty U.S. tariffs imposed on goods imported from America’s three largest trading partners—Canada, Mexico and China—could upend industries from autos to consumer goods to energy.

After threatening tariffs for weeks, the current U.S. administration has followed through with a levy of 25 percent on Canadian and Mexican imports, and an additional 10 percent tax on Chinese goods. Canadian energy faces a 10 percent tariff.

To counter the U.S. tariffs, Canada will start by slapping 25 percent tariffs on $30 billion worth of American goods coming into Canada as of Tues., Feb. 4. The tariffs will then be applied to another $125B worth of American imports in three weeks’ time.

Following is a look at the sectors most impacted by the tariffs/counter-tariffs situation.

Canada’s cost of living. The Bank of Montreal forecasts reduced demand for Canadian goods in the U.S., disrupted supply chains and higher prices for goods in Canada due to Ottawa’s retaliatory tariffs.

Auto Manufacturing. The North American auto manufacturing industry could be facing production shutdowns in Canada, the U.S. and Mexico because it’s such an integrated sector and supply chain.

U.S. tariffs would have a “very immediate and serious” impact on that supply chain, and Americans may soon have to shell out thousands of dollars more for a new vehicle due to more costly parts and components, noted the CEO of the Canadian Vehicle Manufacturers’ Association.

Steel and Aluminum. The United Steelworkers, the largest industrial union in North America, has criticized U.S. tariffs on Canada, citing some $1.3T U.S. in trade between the two countries.

“These tariffs don’t just hurt Canada. They threaten the stability of industries on both sides of the border,” the union’s International President David McCall said in a statement.

The Aluminium Association of Canada called the 25 percent U.S. tariffs on all Canadian goods heading south “highly disruptive” to the integrated economies of the two countries.

Beer, Wine and Liquor. American alcohol will disappear from liquor store shelves in Manitoba, Ontario, British Columbia, Newfoundland and Labrador, and Nova Scotia in a show of support for Ottawa’s plan aimed at getting the U.S. to back down from tariffs. Ontario on Sunday joined those provinces in saying it will remove U.S. alcohol from store shelves, starting Tuesday, when the U.S. tariffs went into effect.

Other sectors facing negative impacts from the tariffs include crop and animal production, with Canadian beef producers warning that the market for beef products could suddenly become unavailable.