Tariffs Won’t Be a Direct Hit on Travel - But They Can Still Hurt

Economists don’t know what to expect on April 2, the day President Trump has promised a wide range of tariffs against America’s trading partners.Which countries? Which products? What rate? And how will countries respond? The lack of answers to those questions has led to widespread uncertainty. Forecasters can’t say how fast – or slow – the economy will grow. CFOs aren’t sure whether to move forward with hiring and investment plans. 

Supporters of tariffs hope for a new fair system with an even playing field for global trade. Others just hope for clarity. 

But it’s also very possible that April 2 – which Trump has dubbed “Liberation Day” – only marks a continuation of start-and-stop policy, with a series of exemptions, delays, and more open-ended threats.

For the travel industry, the impact is indirect. Tariffs apply to imported products — think cars, washing machines, and even champagne. They don’t get added to airfares, hotel rooms, or tours.

But the knock-on effects could be significant. Tariffs will likely lead to higher prices and a stronger U.S. dollar, making America a more expensive destination for visitors. And then there are the vibes. Will tourists still be eager to visit a U.S. that is engaged in a trade war with their home country?

"Trump policies might cut U.S. travel growth by half," said Seth Borko, head of Skift Research, referring to a range of actions like a possible tariff war and increased uncertainty about how border agents will interpret and enforce border rules.