Donald Trump’s escalating trade war with Canada spells trouble for the New York economy, especially the city’s still recovering tourist economy.
The number of Canadians visiting New York fell by 26% last year and spending by tourists from there is down 14% from the pre-pandemic level, according to the Hotel Association of New York.
NYC Tourism + Conventions, the city’s tourism arm, earlier this year revised its forecast for tourism this year downward to 66.3 million visitors this year, a 2% increase from last year and shy of the record 66.6 million visitors in 2019. A further decline in Canadian tourists would endanger that forecast.
“Our tourism economy cannot afford another year of trade wars with Canada that drive away our most important international visitors,” said Vijay Dandapani, president and CEO of the Hotel Association of New York City. “The federal government must reach a deal with Canada and give travelers a reason to come back. If we fail to act, New York risks losing even more visitors from our number one tourism partner.”
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A poll last month by the Angus Reid Institute in Vancouver found that nearly half Canadians hold an unfavorable view of the American public. The disaffection is only growing after Trump recently slapped a 50% tariff on $20 billion in Canadian goods, threatening hundreds of thousands of jobs.
That’s bad news for New York.
The risks extend far beyond tourism if the trade war results in a decline in exports to Canada, which in 2024 totaled slightly more than $20 billion.
Two-thirds of all New York state agriculture exports go to Canada, as well as half of oil, gas and minerals, predominantly diamonds, and 13% of manufactured goods. Canadian Prime Minister Mark Carney said he will unveil a list of retaliatory measures in September. And Trump says more tariffs on Canada are coming in January.
New York companies will feel the impact of higher prices on imports from Canada.
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“These tariffs are a direct tax on Manhattan’s commercial life. A 50% tariff on Canadian cement, dairy, and building materials lands squarely on our construction sites, our restaurants, and our corner stores — and every dollar of it gets passed to New Yorkers,” said Jessica Walker, president of the Manhattan Chamber of Commerce.
She noted the on-again, off-again nature of the Trump tariff policy is particularly difficult for small businesses, which don’t have the staff to cope with trade rules that change by the week.
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