Moneybox

The Trade Surplus That Trump Is About to Kill

Tourism. Who, after all, would still want to come here?

Walt Disney World Resort
Thinner crowds ahead?

Jacqueline Nell/Disneyland Resort via Getty Images

The United States wants to host the 2026 World Cup, and if implemented, President Trump’s travel ban could dash our odds of doing so. “If players cannot come because of political decisions, or populist decisions, then the World Cup cannot be played there,” Aleksander Ceferin, a top European soccer official, told the New York Times this week. “It is true for the United States, but also for all the other countries that would like to organize a World Cup.”

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Talk about an own goal. Hosting the 2026 World Cup would be an economic plus for the United States. We wouldn’t have to build a bunch of new stadiums: Thanks to growth in the sport since 1994, the last time the U.S. hosted the World Cup, there are a few dozen arenas capable of handling big games. And with the format of the tournament expanding from 32 to 48 teams, it would be a huge boon to tourism. In 2014, more than 1 million foreign visitors went to Brazil for the World Cup. Many more than that would attend a World Cup in the U.S. And every penny they spend, in addition to stimulating the economy, would cut the trade deficit.

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We rarely think of tourism as something related to U.S. trade, but we should: Inbound tourism to the U.S. is an export—and outbound tourism from the U.S. is an import. And right now, the policies of the Trump administration are threatening to throw that particular trade balance seriously out of whack.

We Americans are generally a provincial people. There were about 132 million valid U.S. passports in circulation last year—meaning only about 40 percent of U.S. residents have them. And the country is so large and varied that there is plenty to see without having to leave. I’m 49 and have traveled a ton, yet still have not been to nine states.

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But that same variation, size, and scope—the Grand Canyon! Disneyland! Hawaii! Alaska!—is appealing to many of the roughly 7.1 billion humans who don’t live in the United States, an increasing number of whom can afford to come visit. In 2015, there were 78 million international arrivals to the U.S. and 74 million American departures (most of the departures are cross-border jaunts to Mexico and Canada). In the first seven months of 2016, there were 42.8 million arrivals. The upshot: America has a huge trade surplus in tourism. Travel and tourism account for about one-tenth of all exports, and America is the world’s leading export of international tourism and travel. “Expenditures by international visitors in the United States totaled $246.2 billion in 2015, yielding a $97.9 billion trade surplus for the year,” the International Trade Administration reported.

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Of course, international tourism is concentrated on the borders with Canada and Mexico, plus coastal gateway regions like Florida, New York, and California. But you can find international tourists all over the place, in red states and blue ones. Last week I shared a ski lift in Utah with Argentinians. In recent years, I’ve shared a tour with Australians at the Grand Canyon, went on a cruise to Alaska filled with Israelis and Russians, helped Italian tourists with directions on the New York Subway, and latched onto Canadian bicycling pelotons on A1A in Florida.

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The U.S. has a huge competitive advantage when it comes to selling tourism. English is something like a universal global language. Despite the complaints about infrastructure, it is relatively easy to get around America, and there are options for people of all budgets. Airlines like Norwegian Air are expanding international service to the U.S. This is an industry on which we should double down—it supports millions of service jobs, which are distributed around the country.

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Tourism, by and large, is a discretionary item. People have lots of choices as to where they can go. It matters if people have the wherewithal to afford tourism. But it also matters if the country has a willingness and ability to let customers come in, process their exit and entry quickly, and generally let it be known that their patronage is welcome. You would think somebody who has ownership and interests in golf clubs, hotels, and resorts would get that.

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Instead, since Trump’s inauguration, we’ve seen the erection of barriers large and small to people who wish to participate in events or spend money in the U.S. It started with the ban on travel from seven majority-Muslim countries. Aside from harassing our own citizens, customs agents have detained, deterred, or interrogated an Australian children’s book author, a retired soccer star from Trinidad and Tobago, and a French historian. There’s a not insubstantial chance that if you come to the U.S. to stay in a hotel, attend a conference, make a plane connection, or sit on a beach, you might get treated horribly. Imagine checking in at a restaurant with the maître d’ to inquire about your reservation and then being thrown in a broom closet, refused food, and then tossed out on the street. That’s more or less what prospective travelers to the United States are currently imagining about our airports.

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As North Carolina has already learned, being a jerk for no good reason can really sandbag your tourism economy. Will American tourism-dependent businesses suffer similarly? The data on arrivals and spending is reported with a lag of several months, so we won’t know for a while. But the initial indications aren’t great. In February, the Global Business Travel Association said the U.S. industry lost $185 million in bookings in the first week after the promulgation of the travel ban. Online travel sites are reporting that searches for travel to the U.S. have fallen sharply. “It’s known as the ‘Trump Slump,’ ” Arthur Frommer, of the eponymous Frommer’s guide, lamented. “And I know of no reputable travel publication to deny it.”

But the real damage doesn’t come from losing a few people at the margin—those who may decide to ski in the Canadian Rockies instead of the Colorado Rockies, for example. It comes when large organizations that have the ability to direct huge flows of people and dollars decide to start removing you from consideration. Why, under Trump, would the world’s athletes and their fans ever want to gather in this country again?

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