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U.S. tourism industry facing blowback from Trump’s ‘America First’ message

The travel economy may crash and burn under Trump’s restrictive trade policy.

Alex Brandon/AP Photo

If Donald Trump is right that the massive trade deficit is a measure of how the world exploits Americans, tourism is where the United States gets its revenge.

But the U.S. President seems intent on screwing it up with his rhetoric and his actions.

When Mr. Trump says "America First," much of the rest of the world hears, "Foreigners Not Welcome."

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Read more: NAFTA at stake amid backroom battles at White House

The United States is a clear-cut winner in the tourism balance of trade. Without it, the United States' $500-billion (U.S.) goods and services deficit would have been significantly larger in 2016. Foreigners spent $207-billion on U.S. travel last year, compared with $121-billion spent by Americans in the rest of the world. The result is a hefty $86-billion tourism trade surplus.

Mr. Trump is putting this generous gift to the U.S. economy at risk amid warnings that millions of foreigners are now shunning travel to the United States.

The Trump administration has proposed a slew of travel restrictions, including a ban on refugees and travellers from six majority-Muslim countries (measures that are now being challenged in court). Travellers are also facing tougher vetting of visas, more airport detentions and a ban on use of laptops by airline passengers from 10 airports in the Middle East.

The now-infamous video of a "bumped" Vietnamese-American passenger being dragged off a United Airlines flight by armed police in Chicago will no doubt feed foreign paranoia. Among the countries where the video went viral is China, the fifth-leading source of tourists to the United States. (Canada is No. 1).

Throw in Mr. Trump's verbal swipes at various allies and trading partners, and the world has plenty of good reasons to steer clear.

Newsflash: they are. Evidence of a Trump slump is showing up in various travel surveys and data. The Girl Guides of Canada aren't alone in boycotting travel to the United States. Airline bookings to the United States fell by 6.5 per cent immediately after Mr. Trump's initial travel ban in January and have flat-lined in the typically busy months since, according to travel-data provider ForwardKeys.

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Likewise, purchases of travel and tourism expenditures by visitors to the United States fell by 1 per cent in January, compared with a year earlier, in an industry that has shown steady growth for more than a decade. International searches of flights to the United States are down 14 per cent since Mr. Trump's election in November, with particularly sharp declines among Chinese (down nearly 50 per cent) and Mexicans (down 16 per cent) – according to Hopper, a mobile app that tracks airfare trends. And the U.S. Travel Association's monthly Leading Travel Index is predicting weakness in foreign inbound travel for much of this year.

The worst may be still to come. The Trump effect will cause as many as 6.3 million fewer foreign leisure travellers to head to the United States annually, according to an analysis by Tourism Economics. That could cost the U.S. tourism industry more than $10-billion a year. The Global Business Travel Association estimates the U.S. economy will lose $7.4-billion this year as 4.3 million fewer business travellers visit the United States.

There are, of course, other factors at work. The strong U.S. dollar and competition from rival destinations also affect travel patterns.

But the $250-billion U.S. travel industry is clearly worried. The Trump administration's "imbalanced communication is especially susceptible to being lost in translation," U.S. Travel Association president Roger Dow warned recently.

"Mr. President, please tell the world that while we're closed to terror, we're open for business," an exasperated Mr. Dow said recently as the group launched a major lobbying push in Washington.

There are plenty of contradictions in Mr. Trump's muddled economic policies.

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What he's doing to the travel industry seems particularly senseless for a President elected on a promise of creating jobs and economic growth.

The world is a big place and people have many options of where to spend their money.

Unlike protectionist measures, which inflict economic pain on the the giver and the taker, a travel boycott is more of a one-way transaction. And the United States is the big loser.

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