How Will Canada, Mexico Tariffs Impact Travel? Here's What You Should Know.

Canadian, Mexican and American industries react as tariffs take effect

North Americans in the auto, agriculture and toy industries shared their reactions to new tariffs.

• President Donald Trump’s tariffs on imports have ignited a trade war, potentially leading to higher prices for consumers.
• The tariffs could impact the travel industry, potentially leading to higher airfares and a decrease in business travel.
• A strong U.S. dollar could benefit American travelers but may discourage tourism to the United States.

President Donald Trump’s tariffs on imports from Canada and Mexico took effect Tuesday, igniting a trade war. He also doubled a tariff previously placed on some Chinese goods.

The actions have prompted retaliation from the countries – America’s biggest trading partners – and U.S. consumers could see higher prices on a wide range of products, from fertilizers to printed books and sugar.

Those planning vacations could feel the effects, too. Trump’s latest tariffs are likely to have some impact on travelers, though it won’t be as immediate or noticeable as the rise in prices in other areas.

Here’s what travelers should know.

According to Steven A. Carvell, a professor of finance at the S.C. Johnson College of Business at Cornell University, business travel will likely take the biggest hit first.

“This is going to have multiple rounds of impacts, and we are going to see business travel, group travel, corporate travel, decline as a result of it,” Carvell told USA TODAY. “There will be less cross-border travel and less demand for hotel room nights because of that. Group travel will be down because of that, meetings maybe.”

He added that large trade shows like the annual Consumer Electronics Show (CES) in Las Vegas could be affected if businesses decide to prioritize exhibiting in other countries.

While Carvell said it’s unlikely that tariffs will have a noticeable, immediate impact on hotel room prices or airfares, a trade war could affect the supply chain and cause longer-term impacts on the travel industry.

The tariffs could have “major” implications for aircraft manufacturers, added Scott Keyes, founder of Going.

“Planes have thousands of components, many of which are manufactured outside the U.S., and all of which need to be regularly serviced or replaced,” he said in an email. “The longer tariffs last, the more likely we’ll see air travel impacted in the form of higher costs for Boeing and airlines, fewer overall flights, and higher fares.”

In addition to the potential decrease in business travel – leading to fewer flights and higher fares to Canada and Mexico – he said fares could rise because of lost revenue airlines earn from selling empty cargo space to goods shippers. Carriers may attempt to offset that by raising ticket prices.

If the tariffs lead to a recession, however, those costs would likely decrease. “That’s because demand for travel typically falls during economic hard times, and with less demand, airlines would be forced to drop prices in order to fill planes,” Keyes said.

Tariffs can also strengthen the U.S. dollar, benefitting American travelers, he added – though the dollar fell to a three-month low on Tuesday.

The moves could also price some tourists out of visiting the U.S.

“It’s already expensive for non-U.S. people to come here and spend their euros, and this will make it even more so,” Carvell said.

Carvell added there’s a psychological effect that could play out, which could mean American travelers find destinations abroad less welcoming.

“You’re already seeing the narrative of even how Canadians are talking. Do you know how hard it is to get a Canadian to say something negative? Imagine how it’s going to be in Mexico if what we’re doing really causes strife there or in Europe,” he said. “I assume you saw the stuff where people were squirt-gunning tourists in Barcelona. Americans tend to not be difficult to spot as tourists … That’s a separate issue, to what extent local populations are going to react to this and how that’s going to affect a tourist experience, that’s another issue we have to keep in mind.”