How Trump's Policies Cost the US Travel Industry $40 Billion

What the $40 billion figure actually covers

Bloomberg’s tally of “$40 billion” is shorthand for a cumulative shortfall, not a single-year loss. The researcher Tourism Economics estimates that the US tourism industry missed out on as much as $16.6 billion in 2025 and is on track for an additional $21 billion deficit in 2026 — the revenue the industry would have generated had it merely held its pre-Trump share of global travel demand. Bloomberg frames the combined gap as roughly $40 billion. Tourism Economics director Aran Ryan told Bloomberg that “travelers have choices” and that “Trump administration policies and pronouncements are the primary contributor in the US decline that we’re experiencing.”

How the slump shows up in the numbers

The US share of world travel is shrinking even as global demand keeps growing. In 2024, international arrivals to the US rose a respectable 9%; in 2025, they fell 5.5% while the global market expanded 4.7%, a gap of more than 10 percentage points. About 71 million foreign visitors are projected for 2026 — up roughly 3% — but Tourism Economics does not expect a full recovery to the pre-pandemic record of 80 million set in 2018 until 2029. International visitor spending in the US fell 4.6% in 2025, according to the World Travel & Tourism Council, making the US one of just a handful of developed markets to post a decline alongside countries including Haiti, Iran, Nigeria and Pakistan.

Where the visitors are coming from — and where they aren’t

Canada, long the bedrock of US inbound travel, saw visits plunge 21% in 2025 after tariff threats, trade disputes and Trump’s talk of Canada becoming the “51st state” triggered a consumer boycott. That cost US hotels, restaurants and retailers around $4 billion in lost spending and let Mexico overtake Canada as the No. 1 source market. Tourism Economics expects a small rebound this year, but Canadian government data show visits in 2026 through April still down 11% versus the same period in 2025. Among traditionally high-spending markets, UK visits are down 2.2% in 2026 through May after rising just 0.5% in 2025, German visits are down 13% year-to-date, and Chinese arrivals fell 4% in 2025 and another 1.5% in 2026. Lower-spending visitors are partly filling the gap: Ecuadorians are up 21%, Hungarians 18% and Colombians 16% so far in 2026.

Which policies are doing the damage

Bloomberg ties the slump to a stack of Trump-era measures: on-again, off-again tariffs, hardened borders and visa rules, the deployment of federal immigration agents into American cities, and US troop deployments abroad that have made the country feel less welcoming. The proposed overhaul of the visa-waiver system known as ESTA — which currently covers citizens of more than three dozen developed countries — would require applicants to hand over extensive information about social media accounts, family contacts and email addresses from the past decade. The World Travel & Tourism Council estimates that change alone could deter 4.7 million visitors, almost a quarter below the typical level, blowing a $15.7 billion hole in foreign-visitor spending. The broader immigration crackdown is also being tested in court; on 6 July 2026, US District Judge Algenon L. Marbley in Ohio granted a preliminary injunction ordering the Trump administration to resume processing certain immigration-benefit applications that had been frozen by US Citizenship and Immigration Services (USCIS) for nationals of countries covered by Trump’s travel restrictions.

Why it matters

The losses are not abstract: they concentrate in industries that employ large numbers of relatively low-paid workers in gateway cities. Bloomberg notes the average foreign tourist spends about $4,000 per US trip, and the $4 billion Canadian-driven hit alone flows directly into hotel, restaurant and retail receipts. Because the visitor mix is shifting from high-spending Europeans and Canadians toward travellers from less wealthy countries, the per-visitor spending impact may be larger than the headline arrival numbers suggest. A recovery now pushed out to 2029, the year Trump leaves office, also means local governments depending on hotel and sales-tax revenue are looking at several more years of depressed budgets.

The bigger picture: tariffs, agents and optics

The travel data lines up with the wider pattern of the second Trump term. CNN reported on 6 July 2026 that the administration is taking credit for seasonal Walmart discounts on items such as ground beef and soda, tying them to its 250th-anniversary celebrations, while a CNN/SSRS poll found 77% of Americans — including a majority of Republicans — say Trump-era policies have increased the cost of living in their community. A Bloomberg newsletter the same day carried departing Trump economic-adviser Pierre Yared arguing that the disruption of US alliances will ultimately push allies to strengthen themselves. Read together, the reporting sketches a feedback loop: tariffs and political rhetoric deter visitors, the visitor mix shifts toward lower-spending source markets, and the accompanying immigration crackdown — including ICE-style agents in US cities — compounds the deterrent effect for would-be travellers weighing the trip.

Where the reporting diverges

The central numbers come from Tourism Economics and the World Travel & Tourism Council, both industry-facing forecasters, so their assumptions about how many visitors would have come “absent Trump” are necessarily counterfactual. Bloomberg presents those estimates as the central case; no source here offers an independent academic rebuttal. On policy, the administration has not, in the materials provided, publicly disputed the Tourism Economics figures. The Newsweek ruling, meanwhile, shows the legal picture is unsettled: Judge Marbley wrote that USCIS’s freeze “indefinitely pause[d]… final adjudication” of applications and that “national security cannot be ‘a talisman used to ward off inconvenient claims,’” signalling that further court pushback on travel-restriction-adjacent policies is plausible.

What to watch next

Three threads will determine whether the $40 billion gap widens or begins to close. First, the ESTA overhaul — its final scope and any rollout date will set the ceiling on visitor losses from the 40-plus countries in the visa-waiver programme. Second, Canadian and Mexican arrivals through the rest of summer 2026: a sustained Canadian rebound would soften the blow, while continued weakness would confirm Tourism Economics’ cautious 2026 forecast. Third, the litigation track: the Ohio injunction is one of several cases challenging USCIS freezes tied to Trump’s travel restrictions, and any further rulings — particularly on social-media vetting for visas — will shape how restrictive the entry process actually feels to would-be visitors ahead of the 2026 FIFA World Cup, which is expected to draw more than 1.2 million foreign fans to 11 US cities.