$20 billion in U.S. retail spending from international tourists is at risk

Goldman Sachs analysts predict that, in a worst-case scenario, the reduction in travel and boycotts could result in a 0.3% decrease in GDP, equating to a $90 billion loss

The U.S. travel industry is facing a significant challenge as international tourism to the country is expected to decline in 2025. A large part of this decline is tied to both political factors and negative sentiments toward the U.S., contributing to decreased foreign visitation. This downturn could impact the U.S. economy, which heavily relies on foreign spending, particularly in services and tourism.

Key takeaways:

• The U.S. has a large surplus in services, including foreign visitor spending, which reached $254 billion in 2024, a major contributor to the economy.
• However, a decline in international tourism is expected in 2025, as some travelers are opting for other destinations or staying home.
• Factors contributing to this decline include negative sentiments about U.S. politics, especially President Trump’s rhetoric toward foreign nations, and the potential for heightened scrutiny at U.S. airports.
• In March 2025, international arrivals dropped nearly 10% compared to the previous year, and non-essential business trips from Canada to the U.S. are being reduced.
• The economic impact could be significant, with up to $20 billion in retail spending at risk, potentially reducing U.S. GDP by $90 billion, according to analysts.
• This decline in tourism adds to the broader economic challenges posed by tariffs and trade tensions, further hampering U.S. economic growth.

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