REGIONAL — Political tensions between the U.S. and Canada resulted in a significant drop in cross-border traffic and commerce into Minnesota in 2025, according to data maintained by the Bureau of Labor Statistics.
Strained relations between the U.S. and Canada over stiff tariffs, derogatory comments by U.S. President Donald Trump, and threats to annex its northern neighbor have prompted many Canadians to turn away from the U.S., both for travel and for other forms of commerce.
Federal data points strongly to stiff tariffs imposed by Trump on Canada as a major factor behind the decline in visits to the U.S. by Canadians. Despite the unfavorable exchange rate for Canadian shoppers, 2024 had been a good year for cross-border traffic at the busy International Falls port of entry, with personal vehicle crossings up 11.6 percent over 2023.
Yet those visits began dropping steadily beginning in February of last year, as soon as Trump began talk of tariffs and possibly incorporating Canada into the U.S. Traffic cratered still further last April, when Trump announced some of the steepest tariffs ever enacted against Canada. Canadians reacted with boycotts of U.S.-made products and a concerted push to keep their consumer dollars north of the border.
Entries of personal vehicles dropped 39 percent over the prior year last April, and while that traffic has rebounded somewhat since then, crossings by personal vehicles ended the year down 26.1 percent.
The impact of that kind of decline is tough to avoid for businesses in the region that used to rely heavily on Canadian customers.
“It’s very noticeable,” said Nancy Imhof, who operates Mason’s on Main, a well-established retailer of women’s and men’s clothing in International Falls. “We’ve definitely felt it.”
While Imhof said the exchange rate regularly plays a role in the amount of Canadian traffic she sees, the exchange rate actually improved somewhat for Canadians in 2025, as compared to 2024.
“We still see a few Canadian license plates at the grocery store and Menards, but not in the same numbers as in the past. We still do see some Canadian customers, but it’s definitely declined.”
The decline in cross-border car traffic is even more pronounced at Minnesota’s eastern-most port of entry at Grand Portage. Traffic from Canada was up slightly last January over the year before, but it began a steady decline following Trump’s inauguration. After a slight increase in January, cross-border traffic dropped 18.6 percent in February. By April, when Trump announced his tariff plans, Canadian visits fell by 40.5 percent at Grand Portage over the same period in 2024. While that was the worst month, crossings have remained well below previous levels, with many months experiencing drops of 25-30 percent over the same periods one year earlier.
More than car traffic
While personal visits to the U.S. declined more, international commerce by rail, which is key at the International Falls port of entry, also saw major declines, especially earlier in the year. Loaded train containers entering the U.S. at I-Falls were down 12.9 percent on an annual basis. Much of the that decline was seen in the first half of the year, while container shipments have increased over 2024 through the Sept. 1- Nov. 30 period.
Across the country, the number of trucks crossing from Canada into the U.S. was down 12 percent last year, as compared to 2024.
National impacts
The drop in Canadian visitation is affecting the travel industry as well. According to Travel Week, Statistics Canada reported that air travel to the United States from Canada was down 18.7 percent, while automobile traffic dropped by 30.7 percent on a nationwide basis. Meanwhile, Canadian visitation to overseas destinations increased by 10.7 percent, suggesting Canadian travels were opting for destinations other than the U.S.
Manufacturing jobs decline
Trump said his tariffs would help to rebuild American manufacturing, so the decline in cross-border trade could be seen as in keeping with the president’s objectives. But given the integrated nature of the U.S. manufacturing sector with many suppliers from both Canada and Mexico in particular, the impact of the president’s tariff regime has been largely detrimental to the manufacturing sector, at least so far. According to federal data, manufacturing jobs in the U.S. have declined by approximately 70,000 since Trump took office last January.