US tourism takes a hit as foreign travelers cancel plans over tariffs, detentions

The United States is facing a sharp economic blow in 2025 as foreign tourists stay away, with tariffs, rising geopolitical tensions, and increased hostility at US borders contributing to a dramatic pullback in international travel and retail spending. The shift could cost the US economy up to $90 billion, according to new reporting from Bloomberg.

In an article published 15 April, Bloomberg’s Augusta Saraiva reported that non-citizen arrivals by air fell nearly 10% in March compared to the same period last year. International travelers spent a record $254 billion in the US in 2024, but that momentum appears to be fading fast.

A Bloomberg Intelligence analysis estimates that nearly $20 billion in foreign retail spending is at risk, while Goldman Sachs analysts Joseph Briggs and Megan Peters warned that the broader economic impact could shave 0.3% off US GDP, equivalent to nearly $90 billion in lost output.

Trump’s policies drive travelers away

At the center of the backlash is former President Donald Trump, whose return to the political spotlight has already sparked a wave of tariffs, nationalist rhetoric, and hardline immigration messaging. These have directly contributed to growing unease abroad—and a noticeable decline in the number of foreign visitors.

Tourists look elsewhere

One of those skipping the US this year is Curtis Allen, a Canadian videographer who canceled a planned camping trip to Oregon after Trump imposed new tariffs on Canada and suggested it should become the 51st US state.

“We’re not just staying home,” Allen told Bloomberg. “We’re going to go spend the same money somewhere else.”

Allen’s protest doesn’t end with travel. He’s also canceled his Netflix subscription and is actively avoiding American imports.

In Canada, major institutions—including a pension fund and a leading hospital—are now advising staff against travel to the US, citing recent reports of harsh detentions at American airports, even for travelers from traditionally close allies like France and Germany.

Tourism industry feels the pinch

The fallout is already evident. US airfares, hotel rates, and car rental prices all declined in March, according to the latest Consumer Price Index report. Inflation Insights president Omair Sharif pointed to an 11% drop in hotel rates in the US Northeast, likely tied to a drop in Canadian tourism.

The timing is particularly painful for companies preparing for the summer travel rush. Rainbow Air Helicopter Tours in Niagara Falls, which recently spent $25 million on upgrades, is watching closely. “We are waiting to see the fallout,” said sales and marketing manager Patrick Keyes.

Bookings from Canada are down 70% through September, according to OAG Aviation, while European summer reservations at US hotels are down 25%, per Accor SA CEO Sébastien Bazin, who attributed the drop in part to the “bad buzz” surrounding border treatment of foreign nationals.

Despite the downturn, tourism boards like Travel Oregon are pressing forward with international marketing efforts but may pivot more toward domestic audiences if trends persist. “Oregon is not and will not take its eye off those international markets,” said CEO Todd Davidson.

Economic and reputational costs

The foreign tourism backlash stems not only from recent tariffs and border policies but also from a broader shift in how the US is perceived abroad. Goldman Sachs notes that Washington’s increasingly aggressive stance toward historical allies has eroded goodwill and discouraged foreign spending.

Trump’s return to nationalist policies and trade aggression has amplified these concerns, casting a shadow over the country’s reputation as a welcoming destination and reliable partner.

“This headwind provides another reason... why US GDP growth will likely underperform consensus expectations in 2025,” the analysts wrote in a March report.

For now, the US remains a top destination, but with travelers opting for places they view as more welcoming—and with fewer political strings attached—America's tourism-fueled economic engine may sputter when it's needed most.