As the trade war still rages and President Trump’s travel restrictions make traveling to the US harder than ever, businesses will think twice about sending their road warriors to the US.
According to Politico, business travel bookings from Europe to the United States were down 26% from a year ago the same time. According to Impact Policies, “Global business travel spending is projected to fall by up to $88 billion in 2025, a significant threat to the $1.63 trillion industry forecast for the year.”
With travel uncertainty, rising tariffs, geopolitical tensions, tighter border control and the global trade war flaring, businesses may choose to look for alternative markets as SMEs and multinational businesses alike are starting to feel the pressure. This article will look at practical strategies to mitigate the risks, but first off, let’s look at what is a trade war.
What is a trade war?
A trade war is when countries use trade to dictate the geopolitical situation. It is essentially an economic conflict between countries that impose tariffs and trade barriers on each other in retaliation, with the aim of protecting their own local industry, jobs and reduce trade deficits. The most recent trade war was between the US and China (2018-2020) when they mutually raised tariffs on hundreds of billions of dollars of goods, hurting farmers and raising manufacturing prices, and leading to a shift in global trade routes.
What you need to know about the Trump Trade War
Mexico and Canada, the US’s closest trade partners having been hit by high tariffs, and with Trump threatening to take Canada as the 51st state, business travel from Canada is down 18.1% and from Mexico by 18.8%. With crack downs at the border, it’s only normal that many international travelers are wary about traveling to the US.
HotelHub data shows international business travel bookings to the U.S. have decreased by 19.3% with respect to last year. Some countries like Germany, France and UK have decreased their travel to the US considerably, with Germany down 30.4%, France down 22.4% and the UK dropped by 14.4%.
The World Travel & Tourism Council, estimated $12.5 billion would be lost in international visitor spending in the U.S. in 2025.
*As of the time of publication, tariffs were not yet in place as their legality is being tested in court.
The role of border restrictions
As business travelers get ready to travel to the US, HR professionals and office managers must be sure to better prepare their travelers for stricter immigration enforcement and more aggressive border screening due to an executive order the President released calling for additional vetting and screening processes. In fact, US Customs and Border Protection data shows that border searches are up 10% from last year.
Some experts suggest that traveling to the US is no longer just a matter of getting a visa and booking a flight, but rather should include getting pre-trip legal advice, using a burner phone and not keeping data on any of your electronic devices should be crucial steps when preparing for a business trip to the US. When asked at the border why workers are traveling to the US, it’s a good idea to say, “attending meetings” instead of “I’m here for work”, which can lead to delays or even refusal to enter the country without a proper visa.
What employers should keep in mind when sending travelers to the US for business?
Need more information? Download Travel Guide from BCD: Entering the US in 2025
How businesses can respond strategically
Companies that do business with the US can take the following precautions when dealing with the US.
Understand tariffs and rules
Tariffs on imported products have increased costs and contributed to negative sentiment toward the US. Trump’s idea is that tariffs will encourage US consumers to buy more American-made goods. Companies bringing foreign goods into the US must pay the tax to the government. This means customers may have to pay some of the extra costs, and as a result some firms may also decide to import fewer goods. Having a clear understanding of the rules will help your company make better data-driven decisions.
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Consider the impact on scheduled meetings and events
It is possible that as many as 20% of organizations will cancel or move meetings from the US, especially non-US companies, and 14% have relocated or are considering relocating events. If you have an event scheduled in the US, make sure you have a checklist for the participants on how to prepare for their trip, specifically what they need to keep in mind when at the border. Apply for visas well in advance and make sure everyone is well-documented on the situation before traveling. No need to cancel or relocate the event, just make sure everyone is extra prepared!
Impact on SMEs
SMEs may experience disproportionate effects of the trade war due to thinner margins, less leverage, and managing challenges like increased cost of goods, inventory shortages, shifts in supplier relationships and complexity in relation to compliance, especially when dealing with partners in the US. Supplier revenue of travel suppliers and intermediaries are expected to experience a decrease in business travel-related revenue by 37%. There may also be delays, added costs or lost deals due to the rising prices.
SMEs also have less resources to help travelers get ready for their trips to the US, typically they don’t have lawyers on staff, and their HR teams (if they have them) are usually spread thin. This is why it’s important to have a checklist for employees traveling to the US, ensuring that they are prepared.
Navigating the trade war and border restrictions: What businesses need to know
Trade tensions and border policies aren’t going away, and businesses must adapt to the changing conditions whether it be for business travelers traveling to the US or to understand the newly imposed tariffs and regulations, and what that means for your company. With smart planning and strategic shifts, companies can turn the disruption into an opportunity.
Stay informed and work with a travel and expense management company that is up to date on the current trends so they can help you travel safely and smartly.
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