The Canadians Are Angry. Other Tourists Might Be, Too.

2025-10-11 09:00:41

(MENAFN- Live Mint) (Bloomberg Opinion) -- Early in President Donald Trump's first term, there was much talk about whether his xenophobic utterances and immigration restrictions would decimate tourism to the US. In the end, they really didn't.

The number of international visitors to the US fell slightly in the first few months after Trump took office in January 2017, but reports of significant declines for the rest of the year turned out to be the product of a programming error at airport kiosks. Once that was cleared up, the numbers showed international arrivals rising modestly in 2017 after falling the year before. By February 2020, just before the Covid-19 pandemic began shutting everything down in the US, the number of international visitors over the previous 12 months was up by 2.8 million, or 3.7%, from just before Trump became president.

Barring another such data error - which seems unlikely because, unlike in 2017, US Customs and Border Protection numbers show a similar decline to those from the US International Trade Administration that I use in my charts here - there really does appear to be a negative Trump effect this time. The number of international visitors to the US this January through July is down 1.6 million, or 4%, from the same period in 2024, and the US Travel Association is projecting a decline of more than 6% for the full year.

This shouldn't be a huge surprise, considering the ban on travel from 19 countries; the crackdowns on noncitizens who say things the Trump administration doesn't like; the sudden move (blocked for now by the courts) to keep international students from attending Harvard; the immigration raid on a battery plant in Georgia co-owned by the South Korean carmaker Hyundai; and the deportation dragnet that keeps snagging foreigners who are here legally.

That said, the main driver of the decline so far seems to be less those moves than Trump's tariff war with Canada and threats to make the nation the 51st US state. The number of international visitors from countries other than Canada is actually up this year, but the Canadians have canceled that out and more.

To be more precise, the number of visitors from overseas (that is, everywhere but Canada and Mexico) is down slightly after rising 12% last year, and some key countries that usually send many people to the US - Germany, South Korea, France, India - are sending fewer. So the Trump effect is apparent on more than just Canadian travel and is especially notable given that the dollar has fallen in value versus most foreign currencies this year, a development that usually stimulates tourism. But the declines are not across the board, with 12 of the 25 countries that sent the most visitors to the US in 2024 sending even more so far this year, and visits from Mexico up by more than a million.

International visitors to the US are mostly tourists. Of overseas visitors in 2024, 84% were on tourist visas, 12% business visas and 4% student visas - although those here on tourist visas from Latin America and the Caribbean in particular are often visiting family rather than seeing the sights. Canadians generally don't need visas to enter the US, so there aren't equivalent statistics for them. Mexicans do need visas, but the International Trade Administration has breakdowns only for those who arrive by air, of whom 87% were tourists in 2024, 12% on business and 1% students.

Foreign students are of greater economic importance than their relatively small numbers indicate because they're around for months rather than weeks or days and often pay lots of tuition. What's more, those who stay in the US after graduation sometimes end up making important scientific discoveries, running large corporations or otherwise contributing in big ways. Early signs from the visitor data point to sharp declines in foreign-student numbers in the new academic year. The number of student-visa arrivals fell 19% in August compared with August 2024 and is down 12% year to date, with Asian countries driving most of the decline.

The foreign-student decline could have huge negative long-term effects if it persists, but spending by foreign visitors of all kinds amounted to just 0.71% of US gross domestic product in the second quarter, down from 0.73% last year, so this isn't a make-or-break short-term economic issue for the US. The travel decline offers a hint, though, of the burdens that President Trump's chaotic second-term governance is imposing across the US economy. During his first term, Trump's bluster ended up having little effect on travel to the US because for most visitors it had no impact on the experience of coming here. For most it still doesn't, but there are enough disconcerting stories making the rounds to give would-be travelers to the US pause. That, and the Canadians are really mad.