The economic fallout from President Donald Trump’s ongoing clash with a major U.S. ally and northern neighbor is hitting the economy at a particularly inopportune moment.
Canadian tourism to the United States has fallen sharply since Trump returned to the presidency in early 2025 and began a perplexing dispute with the nation’s longtime partner.
He initially dubbed Canada the 51st state as if it were a joke, but he repeated the claim for months. Canadians grew increasingly incensed, and the anger remains today.
Canadians halted traveling to the U.S. in large numbers. In fact, Canadian officials say their citizens spent $18.8 billion on trips to the United States in 2025, per Fortune. That figure sounds substantial, but it is $3.3 billion less than in 2024.
Axios notes that, beyond a 25 percent decline in U.S.-bound travel last year, Canadian government statistics reveal the trend continuing into 2026.
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The impact on the U.S. tourism sector cannot be overstated. Only eight months into Trump’s second term, Las Vegas Mayor Shelley Berkley pleaded with Canadians to return. Las Vegas has experienced a sharp drop in not only Canadian travelers but international visitors overall since Trump resumed the presidency.
“As the mayor of Las Vegas, I’m asking everyone in Canada to come back. We love you, we need you, and we miss you,” Berkley implored, Fortune reports.
And it isn’t only vacationers who are choosing other destinations under Trump. International business travel has declined as well, further dimming the outlook for tourism hubs like Las Vegas and New York.
Fortune notes that business travel accounts for only about 20 percent of all travel to the U.S., yet it makes up roughly 60 percent of revenue from airfare and hotel stays, according to the U.S. Travel Association.
That trajectory is likely to persist both abroad and for Canadian travelers. In August, Trump escalated his dispute with Canada by imposing double-digit tariffs on Canadian goods. Canada responded in kind, angering Trump, who subsequently renamed Lake Ontario to Lake America.
More troubling, observers say, is the perception that Trump is content with the current state of U.S.–Canadian relations.
Trump’s top trade official, Jamieson Greer, describes the president as “comfortable” with the present situation with Ottawa. He also indicates there is no rush to seal a new trade deal, according to CNBC.
“The reality is President Trump is comfortable with where we stand with Canada,” Greer told the network on Sept. 25.
“They call us now and then, and we have constructive discussions about potential deals. But there’s no urgency on our side,” he asserted.
“We’re still obtaining what we need from them in terms of oil, gas, potash, and other necessities. We’re exchanging goods across the border, so there continues to be substantial trade between the two nations,” Trump’s trade envoy boasted.
But the duration of that status remains uncertain.
In a February Politico poll of 2,000 Canadians, 58 percent said the United States was no longer a reliable ally. Nearly 80 percent believe Trump has weakened the U.S.–Canada relationship.
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