US: Tariffs spare travel, but risks remain
Uncertainty, rising costs, and shifting global sentiment threaten tourism, hotels, and airlines - even without direct tariffs on travel
Economists and business leaders are bracing for uncertainty as President Trump prepares to impose a broad set of tariffs on April 2. With few details available - such as which countries and products will be targeted or the rate of tariffs - the move has created widespread unease across industries. Supporters hope for fairer trade, while many others are simply hoping for clarity. The travel industry isn’t directly targeted but could face ripple effects from economic disruption and global sentiment shifts.
Key takeaways
- Economic uncertainty: Lack of clarity on tariff details makes it hard for economists to forecast growth and for companies to plan investments or hiring.
- Indirect impact on travel: While tariffs don’t apply to travel products, they can raise prices, strengthen the dollar, and hurt inbound tourism due to higher costs and negative sentiment.
- Hotels: Tariffs may raise construction costs and prices for imported furniture/fixtures. Extended-stay hotels may benefit from reshoring manufacturing if domestic projects increase.
- Airlines: Facing slower growth due to reduced consumer confidence and business spending. Canadian travel to the U.S. is already declining.
- Stronger dollar: A likely outcome of reduced imports, which may deter foreign visitors and dampen U.S. tourism growth.
- Recession & wealth effect: Consumer confidence is down, and hard data shows a decline in travel spending. Stock market volatility may cause wealthier travelers to cut back.
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