How Trump's Tariffs Could Shake Up Tourism in Portugal

Concerns Over Trump's Tariffs and Their Impact on Tourism

Recent tariffs announced by Donald Trump have raised concerns across various economic sectors, particularly in tourism, a cornerstone of the Portuguese economy. Although the direct impact is not yet visible, industry representatives warn of potential consequences from a possible recession in the U.S. that could undermine American purchasing power and, in turn, affect tourism in Portugal.

Warnings from Industry Leaders

Francisco Calheiros, president of the Confederation of Tourism of Portugal (CTP), expressed fears about how U.S. tariffs might affect national tourism due to reduced domestic consumption in the United States. "We fear that if there is no reasonableness in this matter, it could lead to a crisis for both the American market and its people," he stated after a meeting with Minister of Economy Pedro Reis. He emphasized that a lack of purchasing power equates to decreased consumption.

The Portuguese Association of Travel and Tourism Agencies (APAVT) echoes these concerns, highlighting the risk of inflation and recession in the U.S., which could not only halt the growth trajectory of the American market but also reduce global consumption.

The Importance of American Tourists

According to the National Institute of Statistics (INE), American tourists have been increasingly significant in Portugal, positively impacting the national economy. In 2024, the U.S. ranked fourth among countries spending in Portugal, with an 11.6% increase translating to €279 million, following only the UK, France, and Germany. American tourists accounted for about 5.1 million overnight stays, representing 9% of total overnight stays by non-residents, surpassing 56 million.

Data from the Bank of Portugal in 2023 confirms the robust influx of revenue from the U.S., with American tourists being the fifth largest group of spenders in Portugal, behind Spanish (25.2%), British (12.6%), French (12.4%), and German (8%) tourists.

A Growing Market Under Threat

The substantial increase in American tourism in Portugal has prompted the sector to enhance destination promotion and airlines to invest in new routes connecting the two countries. TAP Air Portugal is set to launch three new routes to the U.S., forecasting a total of 101 weekly flights to North America (U.S. and Canada).

Despite uncertainties, both TAP and United Airlines remain optimistic. TAP expressed confidence in the success of its U.S. routes, in contrast to Air France-KLM, which reported a slight slowdown in economy class ticket sales to the U.S. TAP is set to begin three new routes within the next three months: Lisbon to Los Angeles, Porto to Boston, and Terceira to San Francisco.

While there are currently no visible signs of reduced demand for travel from the U.S., the potential impact of Trump's measures on American wallets could lead to a decline in tourist numbers in Portugal, prompting the tourism sector to closely monitor developments in the U.S.

Government Response

Following a meeting with tourism sector representatives, the government will discuss tariff issues in the upcoming Council of Ministers meeting, considering possible measures to mitigate their impact.

Decline in International Tourism to the U.S.

In light of political instability in the U.S. and the new border control policies under Trump's administration, the president of APAVT acknowledged, although it's early to comment, that "if political instability persists and identity and anti-globalization policies continue, it is natural that we will see fewer Portuguese tourists in the U.S. this year."

Tourism Economics predicts that international tourism to the United States will decline by 9.4% in 2025 due to aggressive border policies by the Trump administration.

Regarding potential complaints from Portuguese tourists at U.S. entry points, the U.S. Embassy in Portugal has stated that it is unaware of any such complaints or issues. "The rules have not changed; every potential traveler to the United States undergoes a rigorous inter-agency security check," said Marie Blanchard, spokesperson for the U.S. Embassy in Portugal.

Similar to other countries, Portugal has recently updated its travel recommendations for Portuguese citizens traveling to the U.S., including specific warnings about gender identity and clarifying that an ESTA visa does not guarantee automatic entry into the country.