Travel suppliers are assessing the implications of newly imposed tariffs following President Trump’s announcement of a 10 percent baseline tariff on imports from nearly all trading partners except Canada and Mexico. The United States Tour Operators Association (USTOA) has released an initial analysis outlining several potential consequences for member companies.
In a briefing to USTOA members, President & CEO Terry Dale shared insights from the association’s government affairs firm, Elevate, highlighting the tariffs’ potential immediate and long-term impacts on travel businesses.
USTOA: Near- and Long-Term Impacts
Near-term concerns focus on foreign travelers’ perceptions of the United States as a destination and potential reputational effects for American travelers abroad. The analysis suggests these sentiment shifts could influence international visitation patterns as trading partners respond to the new tariff structure.
Longer-term implications extend deeper into operational concerns. Elevate notes that broader economic pressures could reduce consumer purchasing power for discretionary spending like travel. Additionally, increased costs for hospitality, aviation and cruise operations may compress margins or necessitate price adjustments.
The hospitality sector faces particular challenges, with potential price increases for imported beverages and goods affecting restaurants, event venues and nightlife businesses that form essential components of the travel experience.
In a recent release from Cornell University’s Media Relations Office titled “Travel and Tourism industry facing strong headwinds under Trump,” Cornell University professor Eswar Prasad said that “Trump has chosen to blow up the system governing international trade” rather than working within existing frameworks to address perceived inequities. This approach has already triggered retaliatory measures from affected trading partners, with European Commission President Ursula von der Leyen warning: “If you take on one of us, you take on all of us” in a recent press conference.
In another recent media appearance, Canadian Prime Minister Mark Carney announced reciprocal 25 percent tariffs on American auto exports, stating, “All revenues from these tariffs will be used to support our Canadian auto workers and their industry.” Canada is also seeing a massive reduction in flights to the U.S. as a result of the tariffs.
USTOA is encouraging members to participate in its Congressional Caucus, scheduled for June 3-4 in Washington, DC. At this meeting, congressional representatives will examine these issues in greater detail.
For more information, visit ustoa.com.
