On-again, off-again tariffs and their toll on travelers

Travel industry doesn't know what to expect from whipsawing US policies with mounting confusion

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ON-AGAIN, off-again tariff policy of the Trump administration has wreaked havoc across the global economy, including the travel industry. Until Wednesday's day-long suspension of reciprocal tariffs, the American dollar was showing signs of weakening; hotels faced higher operating costs and travelers were nervous about booking.

Even before reciprocal tariffs were imposed, the Conference Board's latest index on consumer confidence had dropped to the lowest level in 12 years, possibly driving a chill in travel demand. And, in a survey of its members in early April, the American Society of Travel Advisors said nearly 54% reported a decrease in consumer demand driven by economic concerns.

For the moment, a 10% baseline tariff against most countries has been left in place, with China facing a 125% tariff on goods. While it's unclear what will happen after the 90-day pause, here is a look at how tariffs, or just the threat of them, may affect the travel industry.

The dollar holds, for now

Early in the year, the dollar was close to par with the euro. It is now about $1.10 to the euro, which means a hotel room that costs 100 euros would be around $110.

But retaliatory tariffs from other countries could neutralize the effect on the dollar, according to the Budget Lab at Yale University, a nonpartisan policy research center.