President Donald Trump’s push to isolate America from the rest of the world is succeeding on one front: Foreigners have slashed trips to the United States, leading to a record drop in travel spending.
U.S. trade data released this week show a steep decline in the export of travel services, a measure of how much foreign visitors are spending while they are in America.
The numbers revealed the largest three-month decline in travel exports of the past 25 years outside the months immediately following the Sept. 11, 2001, terrorist attacks and the first year of the pandemic.
A big part of the current decline is a travel boycott by Canadians angry over Mr. Trump’s tariffs and his 51st-state rhetoric. Canada is the largest source of tourism to the U.S.
But travellers from other countries are also avoiding the U.S. over fears it is unsafe, amid numerous reports of immigration officers detaining tourists.
While the U.S. had a US$1.2-trillion trade deficit in goods last year, when it comes to services America had a US$295-billion surplus with the world, with travel being the country’s third-largest services export after the “other business services” category and financial services.
Yet Mr. Trump has long ignored America’s services dominance.
That could be changing. Earlier this week he broadened his America First trade policy beyond goods and threatened to impose a 100-per-cent tariff on foreign-made movies in an attempt to force domestic studios to make more films in Hollywood.
If travel boycotts continue to hit the U.S. tourism sector and erode its services surplus, will Mr. Trump notice? And if he does, could he try to use brute measures such as tariffs or other penalties related to domestic or international travellers to retaliate?
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