ACTA Responds to US Tariffs

ACTA issued a statement today, April 3, 2025 responding to potential impacts on the travel industry from the U.S. tariffs and retaliatory Canada tariffs introduced yesterday and today.

In a nutshell, by using a provision in the law for national emergencies, the U.S. government was able to enact tariffs on products being brought into the U.S. 

Under prior trade agreement protections, Canada will be exempt from some of the tariffs. However, 25 percent tariffs remain in place on steel and aluminum, 25 percent tariffs now apply to Canadian vehicles and products not shipped under CUSMA trade agreement protocols will face either 25 percent tariffs or 10 percent for energy and potash products. Most Canadian products are CUSMA-compliant and those will mainly continue to receive preferential status with no tariffs. 

In response, Canada has introduced reciprocal 25 percent tariffs on vehicle imports from the U.S.

How do tariffs affect the travel industry?

Travel agencies and advisors are not directly targeted by the tariffs, but ACTA has highlighted some areas where they may impact business:

• Cross-border travel: Higher prices for goods and potential economic uncertainty could reduce discretionary spending on travel between the two countries.
• Transportation costs: The 25% auto tariffs may eventually impact rental car prices and transportation services on both sides of the border.
• Consumer spending: Economic pressures could reduce overall travel budgets for both Americans and Canadians.
• Business travel: Companies dealing with increased costs may restrict travel budgets.
• Supply chain disruptions: Travel businesses that rely on imported goods for operations may face increased costs.

The Canadian government has introduced some financial supports as a way to help those who have been or will be adversely impacted by the tariffs. They mainly apply to the industries hardest hit: exporters, manufacturers, and agricultural producers. The new Enhanced EI Work-Sharing Program flexibilities may be applicable to travel agencies. You can read more about that on the ACTA website. 

ACTA responds

The statement puts forth ACTA’s position: “ACTA remains cautiously optimistic but vigilant. While CUSMA-compliant goods are protected, the volatile nature of the current administration suggests that conditions could change rapidly.

ACTA notes that most travel businesses, as service providers rather than manufacturers or exporters, will not be eligible for the "tariff-specific" funding programs announced to date, except for EI flexibilities. ACTA is actively monitoring developments and advocating for targeted support for travel agencies and independent travel advisors.”

ACTA held a townhall meeting last month about the state of Canadian-U.S. relations and how the newly adversarial tone is affecting travel. You can read more about that here: ACTA Town Hall: Canadian-US Travel and Relations.

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