Xenophobic, Isolationist Image Costs US Many Billions in Tourism
By Tom Kagy | 04 Jul, 2025

Tariffs, inflammatory rhetoric and hostile treatment of migrants is creating an uninviting image of the US for prospective foreign visitors, costing the local travel industry $29 billion this year.

Foreigners are seeing the US as a xenophobic nation with an aversion to foreign visitors thanks to high tariffs and ICE policies that appear calculated to keep out all things not American, according to a recent study by the World Travel & Tourism Council (WTTC), as reported by Forbes.

“While other nations are rolling out the welcome mat, the U.S. government is putting up the ‘closed’ sign,” said WTTC CEO and President Julia Simpson in a press release. 

The result is a $12.5 billion drop in spending in the US by foreign visitors compared with 2024.  Add to that the loss of the 9% growth in foreign visits for 2025 anticipated by the trade journal Tourism Economics and the result is a total $29 billion loss in US inbound tourism revenue.  This will eat into the US services trade surplus, which was $293 billion in 2024, adding to the overall US trade deficit with the rest of the world.

Such “sentiment headwinds” is blamed for sharp declines in inbound tourism, with Canadian visitors falling the most at -20.2%, and Western Europe at -4.9%), according to Tourism Economics.

In 2024 Canadian tourists made up about a quarter of all foreign visitors, according to the U.S. National Travel and Tourism Office (NTTO), spending $20.5 billion or about twice what Americans spent at McDonald’s last year.  The trend is likely to persist as Canadian visits in May by car fell 38% and by air 24% from the same month of 2024.  This followed double-digit drops in April and March, making May the fifth consecutive month of worsening declines.  Canadians are traveling as much as ever, just not to the US, according to executives of major travel related businesses.

Industry observers see the trend persisting through the end of the Trump administration,  severely hurting the US hospitality industry.  This doesn't appear to be a concern for Trump and the MAGA-dominated GOP.  The budget for Brand USA was slashed from $100 million to $20 million by a Senate committee led by Texas Republican Ted Cruz.  This is a source of deep concern for the U.S. Travel Association who estimates that “for every $1 spent on marketing, Brand USA adds $25 to the U.S. economy.” 

And of course, the impact of a negative national images goes far beyond inbound tourism to hurt inbound investments, appeal of US brands and products, university enrollment by the most qualified foreign students who make up the backbone of the US tech industry, and the positive image the US has traditionally enjoyed among the majority of the world's nations.  Just as significant for US businesses and broader economy is the catastrophic loss of industrious migrants who normally provide the backbreaking labor that keeps the US agricultural, construction, hospitality, elderly care and manufacturing industries staffed.