Fewer Canadian visitors also jeopardizes California’s wine-export market.
The continuing uncertainty and unpredictability around President Donald Trump’s tariff announcements against Canada are threatening what has historically been a strong alliance between the United States and its northern neighbor.
The increasing tensions are having a spillover effect on the tourism sector, heightened in California because it is among the states Canadians visit the most, according to the U.S. Travel Association.
To date, Trump’s tariffs have targeted Canadian goods that include steel, aluminum, energy and the auto industry. After threatening a 50% tariff early last week on the country’s steel and aluminum, he reduced it to 25% days later after Canada retaliated, then pushed to April 2 the full 50% tariff.
Along the way, and beyond Canada, Trump has either been walking back, pausing or introducing new tariff threats on more goods.
None of Trump’s actions around tariffs are stopping Canadians from increasingly canceling, or hesitating to plan, trips to the United States, according to multiple outlets.
Last year, 20.4 million Canadians visited the U.S., generating $20.5 billion in spending. A 10% reduction could result in 2 million fewer visits and a loss of $2.1 billion in spending, according to the U.S. Travel Association.
Impact on tourism, wine
“Canada is a very important market, both for tourism coming into California and Napa Valley, but also as an export market for California and Napa Valley wines,” said Linsey Gallagher, president and CEO of Visit Napa Valley. “This current trade situation is going to have a negative impact, both on our tourism and our wine sales. That’s not debatable. That is a fact.”
Gallagher has led Visit Napa Valley for six years, having come from The California Wine Institute, where she served for a decade as vice president of international marketing.
“From a wine market standpoint, Canada is the single-largest export market for California wine,” Gallagher said, adding annual retail sales exceeded $1 billion during her tenure, still the current figure on the Wine Institute’s website.
“There has always been a strong and positive relationship between Canada and California,” Gallagher said. “And so that translates into really important inbound travel and very important outbound wine exports.”
A significant setback
It’s still early to know the full impact of the tariff situation, Gallagher noted, but there already has been one significant setback to California’s tourism economy from an international perspective.
Before COVID-19 hit five years ago, 20% of Napa Valley’s visitors came from other countries, including Canada, but that percentage was cut in half during the pandemic, Gallagher said.
Over the past few years, Visit California has forecast international visitation was on track to return to pre-pandemic levels in 2025.
That expectation is now precarious.
Visit California last month reported it would “refresh the forecast in June” because of “rapidly changing conditions” under the Trump administration.
Canadian pride
Earlier this month, Visit California held its Outlook Forum, an annual industry conference that draws delegates from domestic and international tourism markets.
Gallagher attended that conference, held this year in Los Angeles, and said there was a change in perspective from the Canadian representative.
“One of her remarks was that Canadian nationalism and pride has never been higher right now. … They are being encouraged to travel in Canada and to buy wine from Canada,” Gallagher said. “(Canada) is usually the most positive, happy piece of the international puzzle.”
Visit California declined to comment for this story.
The state’s tourism marketing agency, however, recently hosted a Canada Reverse Sales & Media Mission in San Diego, with the purpose of strengthening partnerships and opportunities with the country. Canadian media outlets Travel Press and OpenJaw covered the conference.
“This is an interesting time to come to the U.S.,” Kristen Bonilla, director of public relations at Visit California, stated at the event, as reported by OpenJaw. “California has always celebrated diversity and open mindedness. … We know that these values are also important to Canadians.”
Cancellation watch
Claudia Vecchio, president and CEO of Sonoma County Tourism, said her agency “is carefully monitoring the activity of travelers in both Canada and Mexico, and within both the leisure and business sectors. As of yet, we have not seen cancellations from Canada due to tariffs or other political factors.”
However, she noted, SCT is starting to see cancellations from other parts of the world.
“Just (last) week we had a group from Denmark cancel their Sonoma County visit due to political tensions,” she said.
Traveler sentiment
“I know that politics have always played into how people choose destinations, but we seem to be on the track of getting more intense,” said Dave Bratton, founder and managing director of Future Partners, a San Francisco-based travel research firm that tracks the industry nationwide. “I’ve never seen anything like that before from an American president. I don’t think any of us have.”
Last week, Future Partners held its monthly webinar about the state of travel. The session included a focus group of six Canadians. They were first asked to describe in one word their current perceptions about travel to the United States.
Responses included “complicated, uncertain, avoid and unpredictable.”
One person used the word “necessary” because he has friends and family who live in the states, so won’t be deterred from visiting.
As the discussion continued, the panel was asked to share more details.
One participant, Lily, said she will avoid the U.S. this year, but has a broader perspective.
“I have a lot of friends in the states, and so I know that what is happening at a political level is not always representative of what people on the ground are feeling and their reactions to things,” she said. “They are not unwelcoming, but there is a structure that is making it seem unwelcome.”
Cheryl Sarfaty covers tourism, hospitality, health care, aviation and employment. Reach her at cheryl.sarfaty@busjrnl.com or 707-521-4259.