3 Ways Trump Tariffs Could Impact Travel Spending
Written by
Vance Cariaga
Edited by
Rebekah Evans
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President Donald Trump’s sweeping tariffs on imported goods has already impacted the travel and tourism industries with higher prices — and that impact will likely become even bigger when the summer travel season arrives, experts say.
Both international and domestic travel is expected to take a hit in the coming months amid a dip in consumer confidence and growing economic anxiety over President Trump’s tariffs.
United Airlines recently said it plans to trim its domestic capacity by about 4% beginning in the third quarter in anticipation of lower travel spending and the possibility of a recession, CNBC reported. Other carriers also have trimmed their grown plans due to weaker-than-expected domestic bookings, including Delta Air Lines and Frontier Airlines.
Here are three ways President Trump’s tariffs could impact your travel spending.
Higher Prices
Tariffs are essentially taxes on imported goods and services that will not only increase costs for foreign suppliers, but also increase costs for domestic suppliers if other countries impose retaliatory tariffs. Rather than absorb those higher costs, suppliers typically raise the prices they charge consumers and other customers.
This could apply to the travel industry as well, according to Andrew Harrison-Chinn, chief marketing officer of DragonPass.
“The initial impact of the price rises will be on U.S. consumers, as increased tariff costs are passed on to customers by American firms,” Chinn said.
This doesn’t necessarily mean consumers will cut back on travel. But it could impact where they go and how much money they spend.
Foreign Boycotts
As NBC reported, a recent note from Goldman Sachs analysts warned that under a “worst-case scenario,” the U.S. stands to lose as much as $90 billion in revenue this year from the combined impact of reduced visits and canceled purchases of U.S. goods.
“Our estimates suggest that foreign boycotts of U.S. products will likely impose a modest drag on U.S. GDP growth in 2025, mostly driven by a pullback in foreign tourism,” analysts wrote in a March 31 note — three days before President Trump’s “Liberation Day” tariff announcement.
Recessionary Fears
If the U.S. economy goes into a recession due to President Trump’s tariff plans — as some economists fear — you can expect travel spending to be among the first items Americans trim from their budgets. United Airlines warned that a recession could reduce its adjusted annual earnings to $7 to $9 a share from its currently projected range of $11.50 to $13.50 a share, CNBC reported.
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