Why Canada is winning the travel trade war with the U.S.

Canada is still in the throes of a trade war with the United States. Trade uncertainty and U.S.-imposed tariffs on certain Canadian goods like aluminum and steel continue to threaten the Canadian economy. 

However, there’s one sector where Canada is emerging as the clear winner: tourism.

U.S. President Donald Trump’s divisive politics, tariffs and heightened border security have helped drive a decline in international tourism spending in the U.S. Meanwhile, polls and industry experts suggest a surge in Canadian patriotism and perceptions of Canada as a safe and friendly destination have helped drive a record-breaking summer for tourism in the country.

“Because they're putting up increasing barriers, it makes it increasingly challenging to go to the U.S. So you start to look for alternatives, and Canada is a reasonable alternative,” said Wayne Smith, director of the Institute for Hospitality and Tourism Management at Toronto Metropolitan University.

“In this case, Canada benefited tremendously.”

The Trump administration had suggested 2025 would be a banner year for tourism. The U.S. International Trade Administration announced in August that for the first six months of 2025, year-over-year international visitor spending climbed by 2.2 per cent. 

“President Trump has revitalized our country,” Secretary of Commerce Howard Lutnick said in a statement at the time. “With historic prosperity and President Trump’s focus on public safety, people from around the world are coming to visit in record numbers.”

But a deepening decline in Canadian visitors to the country, which started when Trump took office in late January and launched his trade war, eventually began to take its toll.

Overall, between February and October, the number of return trips by Canadians to the U.S. declined by 21 per cent for air travel and by a staggering 33.5 per cent for land travel, according to Statistics Canada data provided to CBC News. 

The U.S. Travel Association, a non-profit industry organization, now paints a less-than-stellar picture for 2025: It forecasts a 3.2 per cent decline in international tourism spending in the U.S. compared to 2024 — a loss of $5.7 billion US.

The association largely attributes the decline to fewer Canadian tourists. Canadians traditionally make up the largest group of international visitors to the U.S., totalling 28 per cent of its 72.4 million visitors in 2024. 

“We're getting decimated, our border communities in particular, by the lack of Canadian tourism,” said Laurie Trautman, director of the Border Policy Research Institute at Western Washington University in Bellingham, Wash.

She notes that the spending decline comes just a few years after a catastrophic drop in tourism during the COVID-19 pandemic. 

“Many of those businesses got back on their feet and now they've been knocked off their feet again," said Trautman. "So it’s an incredible cost.”