How Trump's Tariff War Could Impact Cruise Ships And Cruise Tourism

President Trump's latest trade war has impacted all countries and industries, including the travel sector. But how are cruise lines doing? While U.S. tourism collapses under global trade tensions and international travel to America drops sharply, cruise lines seem largely unbothered. Of course, the new tariffs are impacting the cruise industry, yet many believe there's no reason to panic.

However, from the passengers' perspective, some things may change. Cruise lines may alter their itineraries, and heading abroad may become more costly. Has President Trump's tariff war impacted the cruising industry and its passengers, and what are the opinions of some of the industry's most important CEOs?

Following Trump's New Tariffs, Major Cruise Lines Reported Stock Price Drops

"It all started in February when Commerce Secretary Howard Lutnick suggested stopping cruise line companies from registering their ships in foreign countries to avoid taxes. You ever see a cruise ship with an American flag on the back? None of them pay taxes ... every supertanker. None pay taxes ... all foreign alcohol. No taxes. This is going to end under Donald Trump."

These words led many investors to sell their stocks, even though experts called this an overreaction. Secretary Howard Lutnick wasn't the first to propose this new measure, as this idea has been repeatedly brought up for over 15 years with no changes whatsoever. However, cruise line stocks fell sharply again in April when Trump officially announced his new tariffs.

Fall in stock prices after Trump's new tariffs (April 3rd)

Norwegian Cruise Line Holdings 16%

Carnival Corporation 13.69%

Royal Caribbean Group 11.04%,

Viking Cruises 8.65%

Lindblad Expeditions 10.14%

The world's leading cruise lines reported significant drops. According to experts, this was the most significant one-day wipeout since the 2020 pandemic. So, how can the recent economic instability affect passengers?

How Will Cruise Passengers Be Affected By Trump's Trade War?

Following Trump's trade war, the U.S. dollar started to lose value, causing negative consequences for Americans traveling abroad. Vacationers on a cruise will notice that dollars can buy less in foreign countries worldwide compared to a few months ago.

In addition, passengers may expect itinerary changes. For instance, some Canadians have reacted to the trade war by deciding not to vacation in the USA again. This isn't surprising, as tension between the two countries is now incredibly high. Not by chance, the Canadian government has recently updated its U.S. travel advisory, warning travelers to 'expect scrutiny' and inspections of electronic devices.

Commenting on the current situation, in an interview with the New York Times, Vinod Agarwal, a professor of economics at Old Dominion University in Norfolk, declared:

"Canadians who want to travel to the Caribbean may not want to go through the U.S. anymore."

However, the problem is not only with Canada. More recently, New Zealand has reconsidered its travel advisory for the U.S. after eight Kiwis were detained at the border under the new immigration laws. The current economic instability may also affect the prices of services on board. While some suggest booking as soon as possible, others believe some people may cancel their trip due to the current economic crisis, leading to more availability. Despite everything, cruise lines' CEOs remain positive.

Cruise Line CEOs Remain Positive Despite Economic Insecurity

At a summit held a few days after Trump's trade war, representatives of some of the world's major cruise lines gathered to discuss the industry's state. Most CEOs seemed to maintain a positive attitude.

For instance, Josh Weinstein, Carnival Chief Executive Officer of Carnival Corporation, declared that even though the season was 'choppy' and 'inconsistent,' the company had registered a new record for future year's bookings. When asked whether cruise lines would be negatively affected by the new tariffs, Josh Weinstein declared:

"The short answer is no, for various reasons. (...) Because of how we could resource a lot locally and we also go to different places, we're not we're not landlocked, so to speak."

Norwegian Cruise Line Holdings' Harry Sommer agreed by adding:

"Two shaky days in the stock market do not lead us to change our long-term strategy,"

John Weinstein, however, also stressed that, at the moment, nobody truly knows what the industry's future will look like, as companies can't predict with absolute certainty how people will react to economic instability.

While Trump's trade war has already impacted the tourism sector in several ways, the cruising industry seems immune, at least for now. While some itinerary changes may occur and prices may fluctuate, experts believe the industry won't be affected by the current economic instability.

https://www.thetravel.com/author/cristina-miceli/

Travelore News: American Airlines Pulls 2025 Forecast On Travel Demand Worries From Trump Tariffs

American Airline pulled its 2025 financial forecast on Thursday, mirroring its peers, as growing consumer apprehension over an escalating trade war result in carriers facing a level of uncertainty not seen since the COVID-19 pandemic.

Economic uncertainty can impact non-essential spending such as travel as consumers turn cautious amid fears of recession from Trump's fluctuating trade policies.

This has created fresh headache for major U.S. airlines, which just two months ago were riding a wave of strong travel demand.

American joined peers Southwest Airlines and Alaska Air to withdraw their annual forecasts, following similar moves by Delta Air and Frontier earlier this month.

United Airlines recently gave two different forecasts and factored in an economic recession into one of them, saying it was impossible to predict the macroeconomic environment this year. Shares of the carrier were down 1.3%, while peers Southwest and Alaska were down 4% and 7%, respectively. Delta and United shares were also down marginally.

American Airlines is also reeling with higher costs tied to expensive labor contracts signed last year.

It forecast its second-quarter adjusted profit per share in the range of 50 cents to $1, compared with analysts' expectations of 99 cents, according to data compiled by LSEG.

In the first quarter, it reported an adjusted loss of 59 cents per share, smaller than Wall Street expectations of 65 cents.

The airline reported a total operating revenue of $12.55 billion, down marginally from a year earlier.

Reporting by Shivansh Tiwary in Bengaluru; Editing by Vijay Kishore, Reuters.