As Trump escalates his protectionist trade agenda, consumers in other countries are taking matters into their own hands by boycotting US products and limiting tourism — a trend that could impact US economic growth.
In a note published on Monday, Goldman Sachs estimated that foreign boycotts could shave 0.1% to 0.3% off domestic GDP in 2025, registering a hit between $28 billion and $83 billion based on current growth estimates of $27.7 trillion.
“Most reports of boycotts of consumer goods have focused on Canada, where 53% of consumers claim to have started some form of boycott,” Goldman Sachs’ economics team led by Jan Hatzius said, citing a recent YouGov survey. “We expect a particularly large pullback in sales of American alcohol in Canada, since most of the provincial alcohol monopolies have removed US products from their shelves.”
Last month, Lawson Whiting, the CEO of Jack Daniel’s maker Brown-Forman (BF-A, BF-B), said Canada’s decision to pull American-made spirits off its shelves was “worse than a tariff because it’s literally taking your sales away.” The executive categorized the move as a “disproportionate response” to the 25% duties imposed by the Trump administration.
US tariff announcements have escalated in recent weeks, and more are coming. President Trump promised reciprocal levies on all US trade partners as soon as Wednesday, which he’s referred to as “Liberation Day.” Trump also plans to impose 25% tariffs on all foreign-made vehicles this week.
Goldman Sachs said those announcements, coupled with a more aggressive stance toward historic allies, have damaged global opinions of US-based companies and the country as a whole.
The firm added certain brands closely tied to Trump, like Tesla (TSLA), have suffered the largest declines in favorability and purchase intentions. But the bigger issue is a pullback in tourist visits to the US, which account for 0.7% of domestic GDP, as visitors from the European Union and Canada, in particular, spend about $50 billion annually on US visits.
According to an analysis of Customs and Border Protection data through March 25, Goldman said foreign arrivals to the 12 largest US airports have declined by 11% year over year compared to 5% growth for US returnees over that same time period.
And as the overarching data unravels, some companies are beginning to flash certain warnings.
Airliner Air Canada (AC.TO), which flies to the US more than any other Canadian competitor, said during its annual shareholder meeting on Monday that travel demand between the US and Canada is particularly weak, echoing broader industry trends that show a 70% yearly drop in passenger bookings on Canada-US routes.
