While trade policy is managed by governments, there is power that rests in the hands of everyday consumers.

Key points

• Consumers play a key role in international trade
• Canadians have been making fewer trips to the U.S. due to the trade war
• "Buy local" can be an effective strategy, but cuts both ways 

Individual decisions add up

With the U.S. and Canadian governments capturing headlines for wrangling over tariffs and other trade issues, the role played by consumers in international trade can seem minor by comparison.

The millions upon millions of voluntary purchasing decisions by everyday Canadians can, however, have a huge impact. This is why government-imposed tariffs work and why they are so harmful. When the price of an item imported from a particular country goes up because of tariffs, consumers adapt by buying less of it or seeking substitutes for it. As anyone on a budget—and that’s almost everyone—will tell you, price matters.

There are, of course, limits to this—viable substitutes might not be available (or may be even more expensive) and some consumers will pay the extra costs because they feel they have no alternative (or, more rarely, because price does not matter to them).

Voting with their feet (and flights)

Consumers also have the option to voluntarily change their purchasing patterns independent of the distortive effects of tariffs or other public policy measures (e.g., banning the sale of U.S. alcohol).

This seems to be what has been happening with regard to Canadians travelling to the U.S. In the wake of bombastic tariff threats and references to annexing Canada in the early part of 2025, trips by Canadians to the U.S. plummeted.

The number of Canadian residents returning from visits to the U.S. was down by 22% (about 4.2 million fewer trips) during the first half of 2025 compared to the same period in 2024. In Alberta, the falloff in visits to the U.S. has not been as dramatic, but the numbers are still well below pre-trade war levels.

An Abacus survey conducted in January found that about a third of Canadian adults who did not travel to the U.S. in the previous 12 months considered doing so, but decided against it because of their feelings about Donald Trump or how the United States is treating Canada.

There was some pickup in visits to the U.S. in the second quarter compared to the same period last year, but this upward momentum may well peter out now that the trade war has heated back up.

There are, of course, many factors that can influence the flow of Canadian tourists into the U.S. including the exchange rate.

As we can see in the chart below, the exchange rate has been relatively stable over the last couple of years, which suggests that it has not been a key factor driving the recent drop off in visits to the U.S.

A double-edged sword

As the travel numbers suggest, the voluntary choices of consumers (travel bans or new tariffs on travel services to the U.S. have not been imposed) can have significant impacts.

This helps make the case for buying local as a response to trade disputes. Counter-tariffs or not, Canadians can choose to purchase fewer U.S. goods and services as a response to U.S. protectionism.

There are two critical caveats to this.

First, trade makes sense. Canada, for example, doesn’t need all the energy and food it produces and we enjoy many goods and services from around the world that we would not have access to without trade.

Trade also encourages lower prices and higher quality through competition and more efficient supply chains. Ideally, countries get along and find ways to pursue mutually beneficial trade relationships rather than turn inward and try going it alone.

Second, buying local/domestic is great when you do it, but not so great when your non-local/non-domestic customers do it. “Buy American” is not, for example, great for Canada.

As such, we should absolutely support our local producers, while also being open to global competition. A trade war can tip this balance in favour of more local buying, but we shouldn’t lose sight of the bigger trade picture and its long-term benefits.

Answer to the previous trivia question: Canada’s Chief Trade Negotiator to the United States is Janice Charette.

Today’s trivia question: Which country is the most popular tourist destination?