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

Canada is ease in the throes of a merchandise state of war with the United States. Merchandise precariousness 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.

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.”

Is the U.S. Starving for Canadian travellers? | About That

A new Angus Reid poll suggests the Trump Administration has played a central role in the decline. Of 1,607 Canadians surveyed in late October, 77 per cent said they view the U.S. More negatively as a travel destination this year compared to previous years.

The top reasons respondents gave for avoiding the country included a resolve to stand up for Canada (in response to the trade war and Trump calling Canada the 51st state), and concerns about America’s political climate and border security.

Those concerns have been fuelled by stricter entry rules for some Canadian visitors, the recent detainment of several foreigners at the U.S. Border and dramatic video showing U.S. Immigration and Customs Enforcement (ICE) arresting people as part of Trump’s immigration crackdown. 

“Tourism is very much a safety-based industry,” said Smith.

“[Canadians] aren't sure when they cross the border if they have to carry around their passport because of ICE,” he said. “Add in some of the political components to it, and the U.S. Looks like a destination that people are going to veer away from.”

America’s loss has become Canada’s gain, as many Canadian and overseas visitors chose to spend their vacation dollars north of the 49th parallel this year. 

Destination Canada, the country’s tourism organization, estimates year-over-year total tourism revenue for the lucrative summer season of May to August increased by an unprecedented $3.3 billion (six per cent).

Part of that boost came from domestic tourism, which spiked by seven per cent.

"You got a lot of people looking at [the U.S.] and thinking, 'I can stay in Canada and make a really positive contribution to Canadian society,“ said Smith. "You had a perfect sort of storm to make domestic tourism really rise, and powerfully, in Canada this year."

An Angus Reid Poll backs that up. Of 1,075 Canadians surveyed by Angus Reid in early June, 26 per cent said they changed, postponed or cancelled U.S. Travel plans this year. Of those respondents, the majority said they opted instead to either travel within their own province (44 per cent), or to another Canadian province (30 per cent). 

The survey was commissioned by Moneris, a Canadian payment processing company.

Tourism spike seen across Canada

Fewer Americans visited Canada this summer, which led to a 1.7 per cent decline in their tourism dollars, Destination Canada data shows. But an increase in overseas tourism helped make up for it. 

Year-over-year data provided by Statistics Canada shows overseas visitors to Canada between May and August climbed by 2.4 per cent. And according to Destination Canada, their spending soared by 10.4 per cent. 

An online survey of 1,560 people in the U.K., France and Germany back in May suggests the Trump administration influenced their travel patterns. 

Just over half (52 per cent) said they were more likely to visit Canada due to the current political climate in the U.S. On top of that, more than 90 per cent said they viewed Canada as a friendly and safe place to visit.

The survey was conducted by Context Research Group (CRG), the research partner for Ontario’s travel organization, Destination Onatrio. Respondents were polled shortly after several Germans, plus a Welsh backpacker were detained at the U.S. Border, and Trump threatened Europe with sweeping tariffs. 

“We are tangentially benefiting from that kind of political climate right now that's happening in the U.S.,” said William Schatten, co-founder of GRG. 

“Canada is seen right now as a top of mind destination for [Europeans] because there's a sense of safety and security, and being friendly.”

Snowbirds fingerprinted at U.S. Land borders

The U.S. Travel Association predicts international travel will rebound in 2026, driven by the U.S. Hosting FIFA World Cup soccer games in the summer, and the country’s 250th anniversary celebrations.

The travel association has also expressed concerns about a new rule introduced by the Trump administration that could further hamper tourism. 

The U.S. Plans to implement a $250 "visa integrity fee" for visitors who need a non-immigrant visa to enter the country. 

That means Canadian citizens will be exempt, but not Canadian permanent residents and Mexican citizens. Mexicans made up the second largest group of the 72.4 million visitors to the U.S. In 2024, totalling 23.5 per cent. Canada is also hosting FIFA World Cup games.

Visitors may be able to collect a refund once their visa expires, but there are scant details about how the process will work. 

“Raising fees on lawful international visitors amounts to a self-imposed tariff,” said U.S. Travel Association President and CEO Geoff Freeman in a July statement. 

“These fees … do nothing but discourage visitation at a time when foreign travellers are already concerned about the welcome experience and high prices.”

Business Reporter

---

---