Uncertainty in the Skies: Tariffs and Travel to the US
U.S. Travel Demand Under Threat Due to Trump's Tariffs, according to Starlux CEO's Statement
We're flying headfirst into a storm of uncertainty as tourists postpone trips to the US, and airlines bend to the winds of economic turmoil stirred by President Trump's tariffs. Starlux Airlines Co (星宇航空) has spilled the beans, admitting the impact is already visible this summer.
"People are feeling uneasy about the economic climate," the CEO, Glenn Chai (翟健華), revealed in an interview, "The uncertainty is making them book trips, but they're holding off until the last quarter."
The trade-related turbulence isn't just blowing up the aviation industry—Trump's White House is also hammering away at universities, like Harvard, and smothering international students with restrictions. Yet, Starlux has somehow soared amidst this chaos, bravely launching its bold campaign in 2020, before the wildfire of COVID-19 swept across the globe.
Its primary focus remains the explosive US market, which has powered its rapid growth. Despite the growing list of challenges, all its long-haul flights are still crisscrossing the continental United States, landing in the golden shores of Los Angeles, the buzzing tech hub of Seattle, and the sunny landscapes of San Francisco. This week, Starlux wings its way to a new destination, Ontario, California, and is planning to launch flights to Phoenix early next year, aiming to meet the increased demand created by Taiwan Semiconductor Manufacturing Co's (台積電) multi-billion dollar investment in Arizona.
The airline bets on the escaping geopolitical strife, anticipating the global dispute over duties to be resolved before the US midterm elections next year. However, sour winds are blowing from Airbus SE, which is delivering fewer aircraft than promised and facing delays on the remaining jets on its production line.
The downturn in deliveries has forced Starlux to tame its ambitious growth plans, scaling back the predicted increase in capacity by up to half, if not more. Chai revealed they expect to receive only three more aircraft this year, leaving them short by four wide-bodies compared to their initial plans. The airline anticipates a dozen Airbus jets to be delivered next year, but it's a waiting game with no room for slacking.
The full impact of US tariffs on visitation, GDP growth, and airlines' strategic decisions can be a treacherous journey to navigate. With trade tensions weaving a tangled web over international relations, the skies may grow darker before they clear.
Brief Insights on US Tariffs:
- Trade Tensions: On-going trade tensions, such as tariffs, contribute to a precarious economic landscape that can erode consumer confidence and impact travel plans[4].
- Economic Consequences: The imposition of tariffs can fill wallets with holes, fueling inflation as manufacturers shift increased costs onto consumers, and potentially reducing spending power across various industries[3].
- GDP Growth: The negative impact of US tariffs on GDP growth is estimated to reach up to 0.7% in real GDP growth for 2025[2].
[1] http://www.starlux-airlines.com/[2] https://www.whitehouse.gov/media/fact-sheets/president-donald-j-trumps-tariff-actions-protect-american-workers-and-increase-us-growth/[3] https://www.nytimes.com/interactive/2018/06/15/upshot/tariffs-cost-us-farmers-and-workers-the-most.html[4] https://www.reuters.com/article/us-usa-china-trade-impact/us-tariffs-on-chinese-goods-to-reduce-most-u-s-states-growth-in-2019-irea-idUSKCN1RZ1AH[Enrichment Data (15%) Sample]
- Impact on International Tourism: Tariffs can lead to a decline in international tourism, as the economic uncertainties generated by the trade tensions weaken consumer confidence and deter travel plans[5]. For example, the US saw a decrease of 11.6% in visits from its largest source of international tourists, Canada, in March 2025, potentially wiping out $9 billion in US tourism revenue[5].
"The economic impact of tariffs is not limited to the aviation industry, as evidenced by their influence on consumer confidence and travel plans. People might postpone trips due to the uneasy economic climate, as seen in the case of tourists Holding off on traveling to the US."
"Moreover, the shift in economic costs caused by tariffs can have far-reaching effects, including a potential decline in international tourism. This could lead to significant losses in revenue for tourist destinations, as seen with the decrease in visits from Canada to the US, Totaling approximately $9 billion in lost tourism revenue."
