Analysts are warning that the U.S. economy could lose up to $71 billion in 2025 due to declining international travel demand. The drop is being driven largely by a reduction in visitors from China and other Asian markets, following rising geopolitical tensions and the impact of trade policies.
President Donald Trump’s tariffs and increasingly strained U.S.-China relations are believed to be key contributors to this slowdown. Chinese tourist spending in the U.S. has significantly fallen, affecting sectors like retail, hospitality, and luxury goods.
Industry experts also cite uncertainty over visa processes, safety perceptions, and unfriendly political rhetoric as deterrents for inbound tourism. Travel and tourism groups have urged the administration to address the situation, warning that the longer the downturn continues, the more damage it will do to U.S. businesses that rely on foreign tourism.
“Anti-American sentiment could be driving a decline in international tourism, which is considered a service export,” J.P.Morgan said in a note last week.
Goldman Sachs and J.P.Morgan projected lower foreign travel spending to trim 0.1% from U.S. GDP this year, adding that the hit could be as much as 0.2% to 0.3%.
As of the first quarter of 2025, U.S. GDP stands at $23.53 trillion, according to LSEG data, and the impact could amount to anywhere between $23 billion and $71 billion, based on Reuters calculations.
Source: Reuters
