Foreign visitors are canceling trips to the United States in record numbers as U.S. President Donald Trump's trade war escalated, with March seeing a nearly 12 percent decline year on year in arrivals. The U.S. tourism industry has long maintained a significant trade surplus with the rest of the world, generating about 1.3 trillion U.S. dollars in revenue for 2024 and supporting around 15 million jobs, according to the U.S. Travel Association. According to data from the U.S. International Trade Administartion, the decrease was particularly pronounced among visitors from Central America which dropped by 24 percent and Western Europe, down by 17 percent, with Germany and Spain showing the most dramatic declines at 28 percent and 25 percent, respectively. Notably, these figures exclude visitors from Canada, the largest source of international tourists to the United States. The U.S. Travel Association estimates that Canadians contribute around 20 million visits annually, escaping harsh winters to vacation in states like Florida, Arizona, and California, where they generate over 20 billion dollars in spending. But road trips from Canada to the United States have fallen by 32 percent, while the number of people returning to Canada by plane from the United States has decreased by 13.5 percent. This follows Canada's "shop local" campaign launched in response to U.S. tariffs, which has significantly impacted traditional winter sun destinations like Florida and Arizona. Industry experts suggest multiple factors are driving the trend, including the ongoing trade war's ripple effects, negative political rhetoric affecting America's image abroad, and stricter border controls creating an unwelcoming perception. The economic consequences could be severe. The U.S. Travel Association warns the sector might lose 72 billion dollars throughout this year. Goldman Sachs estimates that in the worst-case scenario, reduced tourism could cut 0.3 percent from the U.S. GDP, equivalent to some 90 billion dollars. Tourism Economics, an industry research firm, projected a 9.4 percent decline in international visitors to the United States in 2025 in its report released on April 3, a dramatic reversal from the nine percent increase it had originally forecast at the beginning of the year. Adam Sacks, president of the institute said that despite tourism officials' efforts to counter negative perceptions, the U.S. tourism still faces significant challenges given global backlash against Trump's policies.
Trump's trade war batters US tourism with sharp decline in inbound visitors
U.S. tariffs on Cambodia, which were set at 49 percent, have sparked concerns among the Southeast Asian country's key export industries such as garment manufacturing amid the ensuing economic uncertainties.
On April 2, U.S. President Donald Trump announced the 49 percent "reciprocal tariff" on goods imported from Cambodia, the highest among all countries. Days later, the U.S. reduced the so-called "reciprocal tariff" to 10 percent for 90 days, offering a window period to Cambodia for negotiations with it.
Cambodian businesspeople say the tariffs have the potential to wreak havoc on the country's manufacturing sector, which, according to data from the World Bank, makes up around a fifth of the country's GDP.
"For U.S. manufacturers, definitely, there will be a big impact. If manufacturers are focusing on U.S. products, they are now in the middle. They don't know what they should do at the moment because the tariff now from Cambodia to the U.S. is actually quite high," said Dr. Ben Li, a Hong Kong investor in Cambodia and Chairman of the Cambodia Chinese Commerce Association.
Nevertheless, Li sees the tariff hike as an opportunity to export more Cambodian goods to the European Union, where a majority of Cambodian exports enjoy duty-free status.
"I always say there will be a light (at the end of the tunnel.) Even now, the U.S. tariff is so high, it's going to be so high after 90 days, we don't know. But, there's still a big market to Japan or to the European Union. There's still a big opportunity there," he said.
The Cambodian investor also believes the development of major infrastructure projects will help support Cambodia's economy.
"Especially the new canal and then the new airport, and the railways which connect to China. I believe once the logistics and infrastructure are built up, it can help the whole country's economy. By reducing the transportation costs, it can also mitigate the tariff costs," he said.
Cambodia and the U.S. held their first tariff negotiations on April 16, with more expected to follow. Local experts said the stakes are high for the country's workers.
"If this negotiation fails, there will be a significant impact. It will include the garment and travel goods sector. These sectors consist of about 1,068 factories and 930,000 workers. The income generated from these sectors is about 3 billion dollars per year. So it would significantly impact Cambodia's economy, jobs and incomes," said Chey Tech, a socio-economic research and development consultant from Dynamic Alliance Consulting.
Despite the potential risks, Tech expressed his optimism about a positive outcome, citing Cambodian Prime Minister Hun Manat's letter to Trump on April 4.
"The Prime Minister's letter confirmed that Cambodia would reduce the tariff rate for U.S. goods to 5 percent. Second, Cambodia is the least developed country. Third, Cambodia produces goods that the developed countries won't produce. We asked whether the U.S. would be able to produce these low-cost products. It cannot," said Tech.
In 2024, Cambodia exported goods of 9.9 billion dollars to the U.S., making it the country's largest market, accounting for 37 percent of Cambodia's total exports.
49-percent US tariffs sparks worry among Cambodia's key export industries
