WestJet Executive Details Travel Impact of Trump Trade War

The ramifications of the Trump Administration's trade war with Canada and other historic U.S. allies are already being felt by the travel industry.

Alex Cruz, vice chair of WestJet and former CEO of British Airways, said during an interview yesterday with CNBC that Canadians are increasingly avoiding the U.S. in retaliation for President Donald Trump's steep tariffs on Canadian goods.

"There's clearly been a reaction," Cruz said. "Statistics are coming through about U.S.–Canada border crossings and they've been down over last couple weeks." 

"And we at WestJet have also noticed a decline in traffic," Cruz continued.

Canadians are increasingly changing their destinations to avoid traditional sunny U.S. vacation locations and are instead opting for getaways in other countries.

Rather than visiting "Phoenix or Florida, it's Dominican Republic, Jamaica and Mexico," Cruz added. "So Canadians are seeking to continue traveling overall. It's just that it may shift from the U.S. to other leisure destinations.

When asked by a journalist if he thought the changes were a "backlash" from the U.S. administration's new trade war, Cruz indicated that such sentiments appear to be materializing.

"There is definitely a reaction in travel between the U.S. and Canada," he said, adding that there's also some evidence of a similar reaction growing among Mexican travelers who might have historically visited the United States for vacations.

Changing Canadian travel patterns amid geopolitical tensions have the potential to be economically painful if they continue, with Cruz cautioning: "Let's hope it's temporary. But yes, at the moment, yes, there appears to be an impact downward on travel."

Meanwhile, Cruz indicated WestJet is not seeing similar shifts in travel patterns thus far among Europeans bound for the United States due to geopolitical tensions.

Earlier this week, President Donald Trump imposed sweeping 25 percent tariffs on all steel and aluminum imported into the United States from Canada and Europe. And on February 1, Trump signed an executive order pronouncing 25 percent tariffs on the majority of goods from Canada, with oil, gas and electricity taxed at a 10 percent rate. 

These actions have raised concerns about the potential for a global trade war.

The European Union has already responded with retaliatory tariffs on $28 billion worth of U.S. goods imported to Europe including boats, motorbikes and alcohol. 

Meanwhile, Canadian Prime Minister Justin Trudeau has said the tariffs appear to be designed to cause "a total collapse of the Canadian economy because that will make it easier to annex us."

John Rogers, an economics professor at American International University, has said tariffs are likely to push up prices for consumers in the U.S. and abroad.

Earlier this month, the US Travel Association warned that the Trump Administration’s tariffs on Canada could impact Canadian visitation to and spending within the United States, with even a 10 percent reduction in Canadian travel leading to a loss of 14,000 American jobs and $2.1 billion less in spending.

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