How Will Trump’s Tariffs Impact Travel

Donald Trump’s tariffs on imports from Canada and Mexico took effect on Tuesday. While US consumers could immediately see higher prices on different products, it is also likely to spill over into travel and aviation.

While the effects won’t be immediate on travelers, experts believe there will be repercussions. One of those experts is Steven A. Carvell. Steven A. Carvell, a professor of finance at the SC Johnson College of Business at Cornell University, expects business travel to take the biggest hit from the tariffs.

Carvell said, “This is going to have multiple rounds of impacts, and we are going to see business travel, group travel, corporate travel, decline as a result of it.”  He added, “There will be less cross-border travel and less demand for hotel room nights because of that. Group travel will be down because of that, meetings maybe.” 

Carvell also mentioned that trade shows such as the annual Consumer Electronics Show (CES) in Las Vegas could be affected. With the existing tariffs, businesses could prioritize exhibiting in other countries. 

Can Tariffs Make Travel More Expensive?

As for hotels and airfares, Carvell thinks it is unlikely they will raise their prices.

But Scott Keyes, founder of Going, has a different opinion. He sees the tariffs to have a “major” implication on aircraft manufacturers. Keyes said in an email, “Planes have thousands of components, many of which are manufactured outside the U.S., and all of which need to be regularly serviced or replaced.”

Keyes also foresees fewer flights and higher fees for routes to Canada and Mexico. Carriers could potentially offset their losses from decreased cargo demand from goods shippers. 

If the tariffs will cause a recession, Keyes believes that prices of travel related costs could go down. He said, “That’s because demand for travel typically falls during economic hard times, and with less demand, airlines would be forced to drop prices in order to fill planes.” On the other hand, this could strengthen the US dollar, benefiting American travelers.