Hospitality businesses along the northern American borders are facing challenging financial times as tourism and regular visits from Canadian visitors have fallen in the wake of increased U.S. tariffs and annexation rhetoric from President Donald Trump.
His administration imposed tariffs on Canadian goods under the International Emergency Economic Powers Act in March. Canada responded with reciprocal 25% countermeasure tariffs on nearly $30 billion worth of U.S. imports, including steel, aluminum, and a wide range of consumer products.
Trump did not mention additional tariffs on Canadian products when he announced other global tariffs on April 2 that included a blanket 10% tariff on all foreign imports as well as additional measures for select countries. Yet there is also a 25% tax on Canadian steel, aluminum and cars and most other goods with a few exemptions. New Canadian Prime Minister Mark Carney announced his own 25% tax on U.S. car imports in retaliation later in April.
“The old relationship we had with the United States based on deepening integration of our economies and tight security and military cooperation is over,” Carney said, according to multiple media reports.
Matt Levy has been running Spread Love Tours in New York City for roughly two decades. He says that 65 percent of his school tour business, a major percentage of his annual revenue, traditionally comes from Canada. He won’t reach those numbers this year.
“(Canada) is the largest international market we have by far for tourism groups,” Levy said. “It’s an easy drive from Ontario and other parts of Canada to New York City and they love the sightseeing. But with the tariffs and threats of annexation they are (increasingly) staying home.”
Levy says his business grossed $35,000 from Canadian tourists and school tours in 2024. Thus far in 2025, he estimates having only grossed $5,000. He’s hearing that 2026 could be even worse. Many school boards in Canada, comprised of locally elected or appointed officials, aren’t approving trips to the U.S. since Trump tariffs and his remarks suggesting that Canada become the 51st state.
I’m hearing from (travel) agents that the people or groups who are coming from Canada largely paid their deposit last year,” Levy said. “They are telling me that zero (school) groups are coming (from Canada) to the U.S. year. They would rather go to Vancouver or other parts of Canada, and I can’t say that I blame them.”
Canadian shoppers are appearing less often in Port Huron, Michigan, according to a May 23 article in the Detroit News. That city, like many communities near the U.S. and Canadian border, has come to rely on steady Canadian foot traffic for a healthy economy.
Running store Elite Feet Owner Greg Whitican told the Detroit News that his Port Huron business has been adversely impacted by those tariffs, and that he’s not sure when it may improve.
“We’ve lost a lot of customers,” Whitican said. “I used to have a lot of Canadians from Sarnia (which is across the St. Clair River from Port Huron), as far away as London, who would come and shop and buy their shoes and participate in our running races. And since everything has kind of gone the way it has, we don’t have any.”
While the impact of tariffs on Niagara County, New York won’t be fully realized until the summer travel season, the region is already seeing signs of a slowdown in some areas, said Niagara Falls USA Communications Director Sara Harvey. Niagara Falls USA is a tourism arm of the city. The slowdown she references has included a decrease in hotel and motel occupancy. With fewer visitors, the Falls’ popular sightseeing boat tour Maid of the Mist opened one month later than usual.
Scott Donovan, owner of Donovan Orchards, a cidery in nearby Barker, N.Y., has mentioned to Harvey recently his business regularly draws Canadian residents in the spring, and that his traffic appears to be lower. The Aquarium of Niagara is also reporting a decreased number of visitors.
“There is definitely some sentiment that some Canadian residents are spending less money in the U.S.,” Harvey said. “There does seem to be some negative sentiment.”
Much of Niagara Falls USA’s marketing efforts are in the digital space, which allows the organization to react quickly to changes in the marketplace that may become more evident as the year progresses. Harvey also said the organization generally targets more long-term tourists and visitors, including residents in the U.S. and overseas guests.
The Canadian government issued a warning to its citizens in early April, urging travelers to expect additional scrutiny when crossing the border. The statement indicated that American border officials have been given authority to search electronic devices from laptops and tablets to mobile phones. The government’s statement outlined that refusal to allow such searches could delay or deny a resident’s entry.
This does seem to be an issue for many Canadians whether traveling to the U.S., either for a vacation or just heading over the border to retail stores in northern states, said Sarah Hupalo, a Canadian travel professional with Elite Travel Windsor. Her travel agency is located just across the Detroit River from Michigan and downtown Detroit. “There definitely has been a change in habits,” Hupalo said. For example, some of her clients are willing to drive an extra three hours to fly out of Toronto rather than Detroit because of concerns over travel delays and the possible detaining of Canadian residents. Downtown Windsor is roughly a 30-minute drive from Detroit Metropolitan Airport.
Those sentiments were rarely, if ever, an issue for Hupalo’s clients until the tariffs and annexation talk began.
“People are worried about the unnecessary and added stress of traveling,” she said. “You could be financially and emotionally impacted with the changing rules.”
While the tariffs on Canadian products are motivating its residents to stay away from U.S. retailers and small businesses, Trump’s ongoing rhetoric over annexation to the U.S. is adding fuel to the fire, Levy said.
“That’s what is really angering residents,” Levy said. “They can’t believe all the talk about (Canada) becoming the 51st state.”
Even King Charles III, the ruling monarch in the United Kingdom, has become involved in this discussion. He spoke before the Canadian Legislature on May 27 saying that Canada will remain “strong and free” despite Trump’s ongoing comments about annexing the U.S.’s northern neighbor.
King Charles is also Canada’s head of state, and according to a May 27 article on TheHill.com is the first British monarch to speak on the first day of Canadian Parliament in nearly 70 years.
“The ‘True North’ is indeed strong and free,” Charles said, in reference to Canada’s national anthem, while speaking before its Legislature.
Michigan welcomed nearly 715,000 visitors from Canada in 2023. Those visitors spent more than $237 million in statewide communities, based on data from Pure Michigan, the state’s travel and tourism arm. The state’s sports, entertainment, lakes and wineries alone draw Canadian visitors who provide a $400 million positive economic impact, according to Visit Detroit, a tourism-focused bureau for the city and surrounding communities.
While the summer travel season is just starting, the potential impact is becoming clearer. According to Stats Canada, February 2025 saw a 13.1% decline in Canadians flying back from the U.S. compared to February 2024. As a result, some of the projections from the Stats Canada data indicate foreign tourist spending in the U.S. could fall by 11%. That would represent an $18 billion loss in Canadian residents traveling to the U.S. year-over-year.
According to travel trade publication Travel Age West, air travel bookings are likely to fall significantly. Advanced bookings between Canada and the U.S. for April are under 300,000, which represent a 75% drop compared to a year ago. Monthly bookings from May through September show another 71% fall in reservations.
Vermont benefits from Canadian tourists to the tune of $150 million on average each year, according to the Vermont Department of Tourism and Marketing.
While Vermon’s total tourism economy takes in about $4 billion annually, the organization indicated. Border regions, especially the Northeast Kingdom, as well as cities such as Burlington are particularly vulnerable.
Businesses in northern Vermont are bracing for a summer with fewer Canadian visitors, especially from Québec. Many hotel and inn proprietors have already noticed rising cancellations by phone and email from some of their formerly loyal visitors from up the north.
“We’re definitely ready to welcome them back,” said Jenifer Oliphant, general manager of the Wildflower Inn, Restaurant & Pub in Lyndonville, Vt., “whenever they’re ready to come,” she told Seven Days, an independent online newspaper in Vermont for a May 21 article. “When we see someone that pulls up in a car from Québec,” she said, “I make a point to go over and tell them, ‘Thank you for coming.’”
About 500,000 Canadians visited Vermont in 2023, out of nearly 16 million total tourist visits, according to the Vermont Department of Tourism and Marketing. Visitation has been slow to recover from the pandemic before which Canadian tourists numbered 700,000.
Hupalo has heard from some of her clients confirming that they too are offended by recent policies and rhetoric from the administration toward Canada.
“Some (residents) don’t want to give any business to the U.S. because there is a feeling we are being unfairly attacked,” she said.
That’s a major issue for cities like Detroit, Windsor and countless others along the southern Canadian border where businesses, relationships and families are intertwined. Hupalo has multiple family members living in Michigan. She estimates that half of her neighborhood works over the border.
Daily shopping at retail stores is being impacted as well, Hupalo added. Canadians who shop in the U.S. not only have to pay duties but additional tariffs if they bring items back home. Duty-free stores on the border of the two countries are likely affected as well, Hupalo said.
Meanwhile, tariffs and the annexation rhetoric is impacting her travel business as well. Some of her clients who might normally travel are considering visits to other parts of the world or staycations in Canada. Others are canceling their vacation plans because of general economic and political uncertainties. Hupalo is also aware of some Canadians who have sold second homes or properties in the U.S. because of their concerns and anger.
“We might have a small population compared to some countries but (Canadians) like to travel,” Hupalo said.
In response to a decrease in travel to the U.S., many airlines are reducing the number of daily trips to popular American destinations or routes, adding more routes to areas like Europe instead, she added.
“It makes me sad,” Hupalo said. “I never would have envisioned this happening.”
Notably, visitors from Canada to the Niagara Falls USA website have dropped from second (only to U.S. visitors) to behind such countries as the United Kingdom and Germany in recent months, Harvey said. However, visits to the region from India and other countries have remained relatively stable, according to early data.
“We know that (Niagara) Falls is a destination location so we do anticipate there will still be some interest from other countries,” Harvey said. “We may find that we’ll want to spend more time marketing to the domestic market for visitors who would drive here from the U.S.”
Local business owners in the hospitality sector in Niagara County can access resources through the organization’s website and promote their business in a variety of ways, Harvey said. They may need to get more creative in the short-term to address any reduction in travel from Canadian residents.
“We try to focus on marketing to (tourists) who want to spend multiple days here, Harvey said.
Canadian tourists that book with Levy regularly apologize for canceling their trips because they know that most New York residents are supportive of Canada’s independence and are against tariffs. He tells them these issues are temporary and that student travel to the U.S. will resume, like it did quickly after the September 2001 attacks on New York City and the COVID pandemic. But in the meantime, Levy is marketing to luxury and VIP prospects as a way to make up for the reduction in revenue from Canadian tourism and travel groups.
“I can understand the tariff war with China. But Canada – that makes no sense,” Levy said. “And it’s hurting small businesses everywhere. Things will change in the future but for now, I need to make other (arrangements).”
