'We want them back desperately': U.S. border communities losing millions in sales tax revenue as Canadian shoppers avoid U.S. travel due to Trump's tariffs and '51st state' rhetoric

Trump’s antics irk Canadians

In February, Trump announced a 25% tariff on most goods imported from Canada and Mexico. And although Trump has since initiated a 90-day pause on most of his tariffs, those levied against Canada remain in place.

In fact, Trump has reportedly floated the idea of increasing the automobile tariff against Canada, saying “they’re paying 25%, but that could go up in terms of cars.”

And then there’s his repeated mention of Canada becoming America’s 51st state, a not-so-subtle statement that many Canadians view as a threat. Trump also routinely referred to Canada’s former Prime Minister, Justin Trudeau, as “Governor Trudeau” while he was in office.

But it's not just the backlash to Trump's antics that’s had a negative effect on Canadian tourism in the U.S. In recent months, several foreigners — including a Canadian woman — have been detained while attempting to enter the United States.

The Canadian government recently issued a warning to citizens, urging travellers to expect additional scrutiny when crossing the border, stating that American border officials have the authority to search electronic devices, including laptops, tablets and mobile phones without justification. Refusal to hand them over could result in those items being seized, travel to be delayed or entry to be denied.

With all of these factors in play, it's not a surprise that fewer Canadians are willing to head over to the U.S. to do some casual shopping.

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How the loss of cross-border traffic is hurting local communities

Unfortunately, many local border communities are suffering because of the decrease in Canadian customers.

“We want them back desperately. They are truly missed,” Sylvia Virtuoso, Town of Niagara Supervisor, shared with 7 News WKBW. “Everybody’s budgets are impacted by the sales tax revenue… The outlet mall in the Town of Niagara is the heart of the town. For all of Niagara County, it provides the majority of sales tax revenue.”

Sales tax revenue in Niagara County declined an estimated 1% in January and February, but Erie County has been hit even harder, with county executive Mark Poloncarz telling Bloomberg, “The county’s initial sales tax receipts have slipped 7% through mid-February, a $4.9 million reduction in revenue.”

The effects of this could have far-reaching consequences, as Cheektowaga Supervisor Brian Nowak told 7 News WKBW the decline in revenue would impact “not just the town, but the county too, because you collect county taxes… For our highway department in particular, a lot of the revenue comes to that department from sales taxes, about 75 cents on the dollar.”

It remains to be seen if the drop in Canadian car traffic over the border will continue, and a lot likely hinges on whether Trump and Prime Minister Mark Carney can come to an agreement on key trade issues. Without that, it may be difficult to restore the strong relationship that the U.S. once shared with its neighbor to the north.

Sources

1. CBC: Canadian detained for 11 days by U.S. immigration speaks out for others stuck in limbo, by Yvette Brend (Apr 5, 2025)

2. CTV News: Can a guard search my phone at the U.S. border? Here’s what you need to know (Apr 7, 2025)