Alongside shifts in the trade balance for goods, the latest trade data from the U.S. Bureau of Economic Analysis (BEA) also captures one of the knock-on effects of the U.S. trade war — a sharp drop in travel to the U.S., National Bank Financial Inc. (NBF) reports.
While the international trade data for March highlighted a jump in U.S. goods imports, as businesses scrambled to avoid looming tariffs, NBF noted that the report also revealed a sharp decline in travel exports — such as hotels, meals and travel costs paid by foreign visitors to the U.S.
Overall, services exports dropped by US$900 million in the month, driven by a US$1.3-billion drop in travel, the BEA reported.
NBF noted that the 7.1% drop in the month represented the “worst decline” in nearly 25 years, excluding the pandemic lockdown.
“Over the last three months, the decline has been a whopping 10%,” the report said — adding, “These figures confirm what airline ticket sales data had already suggested in recent weeks, namely that some travellers are now shunning the United States.”
The economic fallout from this shift will include negative impacts on “production and employment in tourism-related sectors,” the report said — along with negative consequences for, “the financial results of companies that depend on foreign visitors.”