(Bloomberg) —
The US economy is set to lose billions of dollars in revenue in 2025 from a pullback in foreign tourism and boycotts of American products, adding to a growing list of headwinds keeping recession risk elevated.
Arrivals of non-citizens to the US by plane dropped almost 10% in March from a year earlier, according to data published Monday by the International Trade Administration. Goldman Sachs Group Inc. estimates in a worst-case scenario, the hit this year from reduced travel and boycotts could total 0.3% of gross domestic product, which would amount to almost $90 billion.
Foreign tourism has been a tailwind for the US in recent years as the cessation of pandemic-era restrictions sparked a resurgence of international travel. But many potential visitors are now rethinking their vacation plans amid increased hostility at the border, rising geopolitical frictions and global economic uncertainty.
One of them is Curtis Allen, a Canadian videographer who canceled an upcoming US vacation after President Donald Trump imposed punitive tariffs on his home country and suggested it should become the 51st US state. Allen and his partner have been on multiple camping trips to Oregon over the years, but this year, they will be traveling around British Columbia instead.
“We’re not just staying home,” said Allen, 34. “We’re going to go spend the same money somewhere else.”
Allen’s hesitance doesn’t stop there. He canceled his Netflix subscription and is actively avoiding American imports at the grocery store.
“Now it takes us double the time, because we’re looking at where the products came from,” he said.
International travelers spent a record $254 billion in the US last year, according to ITA figures. Coming into 2025, the outlook was positive: The ITA projected in early March that the US would welcome 77 million visitors this year, just shy of the 2019 record, before pushing to a new high in 2026.
But those estimates came out just before stories of harsh detentions at US airports, ensnaring travelers from countries like France and Germany, started making headlines. Major public institutions in Canada, including a pension management firm and a leading hospital, are now advising staff against traveling to the US.
Almost $20 billion in retail spending from international tourists in the US may be at risk, according to a Bloomberg Intelligence analysis.
Early signs of a sharp pullback are already showing up. Airfares, hotel rates and car rental costs fell in March, according to a monthly Bureau of Labor Statistics report on consumer prices published April 10. Economists at Goldman Sachs and HSBC Holdings Plc said lower demand, including from foreign travelers, probably played a role.
