New York's economy is taking a hit in the escalating trade war between the United States and Canada, causing red flags to be raised by New York City's hotel industry and generating increased efforts by the state to draw in more Canadian tourists.
Data from the state's economic development arm — Empire State Development, or ESD — revealed Canadian visitation to New York dropped more than 26% in 2025 despite an overall visitation growth of 1.1%. As a result, spending from Canadian travelers fell 28% between 2024 and 2025, according to the ESD.
A tourism-related report released by the state Comptroller's Office in April also showed travel from Canada in areas along the Canadian border decreased by more than 21% in 2025, resulting in nearly 3.6 million
fewer visitors. Exports to Canada also dropped by $3.8 billion due to the Trump administration's tariffs, the report revealed.
The economic back-and-forth between the U.S. and Canada began early in President Donald Trump's second term and has only continued to intensify. Most recently, Trump imposed 50% tariffs on about 5% of Canadian imports on Aug. 22 and threatened to double the country's tax on automobiles and auto parts imported from Canada to 50% two days later, according to USA TODAY reporting.
In response, Canada announced tariffs on $20 billion worth of U.S. imports ranging from a 15% tax on electronics and tools to a 50% tax on steel, aluminum, furniture and clothing. These retaliatory tariffs are set to take effect on Sept. 8.
Gov. Kathy Hochul told the USA TODAY Network on Tuesday, Aug. 25 that New York has around a $40 billion trade relationship with Canada.
"This hostility toward Canada is unprecedented," the governor said, adding that Trump's actions are creating a wound that is "probably going to take a long time" to heal.
Hochul doubled down on her stance while speaking with reporters at the New York State Fair in Syracuse on Wednesday, Aug. 26.
"Why are we unleashing, literally, a war on our best friends to the North?" Hochul said. "As someone who grew up in Buffalo, I have a deep relationship with Canadians. They fill our stands. They come to our county fairs. They go to the Bills games, they go to the Bisons games, they go to Sabres games along the northern border. They're critical to the economy from Plattsburgh and beyond."
Why is the hotel industry worried about the ongoing trade war?
A recent report released by the state Comptroller's Office revealed hotels in New York City are still struggling to recover from pre-pandemic losses, a problem the Hotel Association of New York City (HANYC) says could be worsened by the latest trade war between the U.S. and Canada.
Hotel occupancy across New York state decreased by 1.2% in 2025, another report by the Comptroller's Office shows. HANYC says bookings for September are still underwater; the organization expects them to remain below 2019 levels.
That's why they're calling on the federal government to make peace with New York's northern neighbor as Canadian tourism is "essential to the success of New York City's tourism economy and the hotel industry that supports it."
"Our tourism economy cannot afford another year of trade wars with Canada that drive away our most important international visitors," HANYC president and CEO Vijay Dandapani said in a written statement on Aug. 24.
"If we fail to act," Dandapani said, "New York risks losing even more visitors from our number one tourism partner and economic activity our sector depends on."
The Trump administration, however, says it has boosted tourism across the country.
"President Trump has done more for American tourism than anyone, including by making our cities safe and beautiful again for all to enjoy and bringing major events like the Los Angeles Olympics and FIFA World Cup to the United States and Canada," White House spokesperson Anna Kelly said in a written statement on Wednesday.
"The administration also spared no effort giving our country’s 250th anniversary the spectacle it deserved, which was witnessed by visitors from around the globe. His America First agenda has restored our nation’s place as the leader of the free world once again – making it the best place to live or visit,” Kelly said.
How New York is trying to encourage Canadian tourism
According to the state Comptroller's Office, there was no growth in consumer spending by international travelers in New York from the final quarter of 2024 through the third quarter of 2025. And in the regions hugging the northern border, travel-related employment declined through September 2025. Specifically, the North Country region saw a 1.9% drop. More than 650 jobs were lost in western New York.
Last week, the ESD launched a NY LOVES CANADA promotion to try and smooth the countries' currently troubled relationship.
"Beyond a border, New York and Canada share a long and vibrant history and a strong trade partnership that has spanned generations," ESD president, CEO and commissioner Hope Knight said. "Under Governor Hochul's leadership, we want to reinforce the importance of that relationship by encouraging Canadian travelers to plan a visit to explore and experience our state."
The promotion includes discounted rates at hotels, reduced admission to museums and discounts at various coffee shops and wineries throughout the state. It aims to entice more Canadian visitors to New York during the final weeks of summer.
New York officials respond to Trump's 'Lake America' suggestion
President Trump also recently asserted he was "giving serious consideration" to changing the name of Lake Ontario to Lake America, which was met with immediate backlash from Democrats.
Rep. Timothy Kennedy, a Democrat who represents western New York, called the proposal "pathetic."
"If Donald Trump spent half as much time trying to make life more affordable as he does trying to rename bodies of water, working families might actually be able to afford their rent, utility bills, and food costs," Kennedy said in a written statement on Aug. 25.
"By declaring economic war on Canada, our strongest ally and New York's largest trading partner, President Trump is waging that same war on border communities like Western New York, and we have been paying the price," Kennedy said.
And U.S. Senate Minority Leader Chuck Schumer addressed the issue in an X post on Wednesday, saying, in part, "Donald Trump's personal grievances first, Americans last."
Monroe County executive Adam Bello also chimed in on Trump's name change proposition on Tuesday.
"There are plenty of things that actually deserve our attention, renaming Lake Ontario isn't one of them," Bello said. "So, for the record, Lake Ontario will remain Lake Ontario. Ontario Beach Park will remain Ontario Beach Park. The Genesee River is safe. So is the Erie Canal."
The USA TODAY Network reached out to Republican gubernatorial candidate Bruce Blakeman's campaign for comment on New York's Canadian tourism decrease as well as Trump's "Lake America" comments and did not receive an immediate response.
Emily Barnes covers state government for the USA TODAY Network-New York with a focus on how policy and laws impact New Yorkers' taxes, communities and jobs. Follow her on Instagram or X @byemilybarnes. Get in touch at ebarnes@usatodayco.com.
This article originally appeared on Rockland/Westchester Journal News: How Trump's escalating trade war with Canada is affecting NY economy
