The economic fallout from US President Donald Trump's trade war is becoming clearer, with new data showing a sharp decline in Canadian tourism to the United States. According to a report by Business Insider, researchers at the University of Toronto's School of Cities found that Canadian visits to US cities have dropped by an average of 42% year-over-year, a much steeper decline than the 25% estimated previously from border crossing data.
This analysis, based on cell phone records, revealed that the downturn is not limited to traditional destinations like Las Vegas and Orlando but extends to major commercial hubs such as New York, Los Angeles, San Francisco, Dallas, and Houston.
Trump's Trade War Also Impacts Business Travel
As per the BI report, the study further highlighted that fewer Canadian tech and finance employees are travelling for work, reflecting broader economic uncertainty. "I fly to San Francisco all the time. It's a tech flight to San Francisco — that's who's with me on the flight," said researcher Karen Chapple, noting the sharp reduction in business-related travel. Mid-sized cities with strong industry ties, such as Grand Rapids and Flint, Michigan, have also seen significant declines. Grand Rapids, closely linked to Ontario's automotive industry, recorded the second-largest drop in Canadian visitation, likely due to tariffs disrupting cross-border supply chains.
Strained Cross-Border Ties
Of the 267 US cities studied, only three saw an increase in Canadian visits compared to the previous year. The findings underscore how Trump's tariff policies have strained economic and cultural ties between the two countries.
Recovery Uncertain
Canadian visits had only recently rebounded from the COVID-19 pandemic slump, taking nearly three years to recover. With the latest downturn, analysts caution it is too early to predict how long this new decline will last or whether tourism and business travel will stabilise under current trade conditions.
Donald Trump 'Forces' Canada to Kill Tax on Amazon, Apple, Microsoft and Google
Recently, US President Donald Trump notched a significant trade victory as Canada announced it will rescind its controversial Digital Services Tax (DST) targeting American tech giants, just days after Trump threatened to halt all trade negotiations with Ottawa. On June 29 evening, Canadian Finance Minister François-Philippe Champagne declared, "Canada would rescind the Digital Services Tax in anticipation of a mutually beneficial comprehensive trade arrangement with the United States." The decision halts the collection of the 3% tax on digital services revenue from companies like Amazon, Google, and Meta, which was set to begin Monday, June 30, 2025, and would have applied retroactively to 2022.
The reversal follows Donald Trump's Friday bombshell on Truth Social, where he announced the immediate termination of trade talks with Canada in response to the DST, which he deemed unfair to American firms. The move sent shockwaves through markets and intensified pressure on Canada, a key US ally.
