Canada-US Trade War Escalates, Threatening Tourism Recovery
A trade dispute between Canada and the US has reached new heights, threatening the tourism industry's recovery. The cross-border relationship between the two countries has been unraveling for 18 months, with trade talks collapsing in August, triggering a fresh round of steep tariffs.
Canadian Prime Minister Mark Carney said the country will match the US's 50% duties on goods such as alcohol, hockey equipment, and dairy products. Ottawa will impose retaliatory tariffs on September 8, targeting dairy, appliances, agricultural equipment, pulp and paper, and electronics.
The data already shows a stark story: Canadian travel to the US fell 25% last year, with early 2026 data showing the decline has persisted. Canadians spent C$3.3 billion less on trips to the US in 2025, with lower leisure travel accounting for most of the decline.
The slump is not just driven by prices; research found that Canadian visits to the US fell by about 25% amid Trump's rhetoric and escalating tariffs. A Leger survey showed that 67% of those who decided to boycott travel to the US in 2026 did so because of the political climate.
Border towns feel the pain most, with a Joint Economic Committee report finding that Canadian tourism contributed $20.5 billion to the US economy and supported 140,000 American jobs. The human cost is visible in testimony from shop owners near the border, who describe empty parking lots and a threat to their livelihood.