A recent Corporate Traveller Canada survey conducted by YouGov, reveals that 85% of small and medium-sized enterprises (SMEs) would reduce cross-border travel for business if tariffs or trade restrictions are imposed by the Donald Trump’s new administration in the US.
With SMEs making up 98% of all businesses and almost 90% of the private workforce, the trend could have widespread implications for Canada’s economy, disrupting business relationships, supply chains, and the broader tourism and hospitality industries, says Corporate Traveller, a corporate brand of Flight Centre.
However, not all SMEs are aligned, showing the divided nature of the current economic climate.
Key Insights:
Divided Opinions: Nearly half (48%) of Canadian SME workers believe US-Canada trade tensions will cause significant or some disruptions to business operations over the next 12 months, while 47% expect minimal or no impact. Among Canadian SMEs with US operations or clients, 44% report increasing cross-border travel due to trade policy uncertainty, while 40% have reduced such travel.
Shifting Travel Patterns: 85% of SMEs anticipate reducing cross-border travel to the US, including 59% expecting significant or moderate disruptions; 77% of SMEs are exploring alternative international markets, with this shift being more pronounced among small businesses (80%) than medium enterprises (73%).
Tariff Concerns: 65% of Canadian SME workers are concerned about the potential impact of US tariffs or restrictions, including 22% who are very concerned.
“The conversations around potential US tariffs and trade restrictions often focus on rising costs, but their impact on business relationships and cross-border travel is just as critical,” says Chris Lynes, Managing Director of Flight Centre Travel Group, including global travel management company, Corporate Traveller. “Our survey shows Canadian SMEs are not only cutting back on US travel but also exploring new markets. While these shifts could reshape the landscape of North American business short term, the Canada-US partnership remains strong and will endure.”
Signalling a potential realignment of business strategies, 77% of SMEs surveyed said they are considering increasing their corporate travel to alternative international markets.
“As Canada’s businesses anticipate disruptions, many are already preparing by pivoting to global opportunities outside the US. This is not just a response to tariffs; it’s an opportunity for growth and diversification,” says Lynes.
Still, the ripple effects are concerning, says Flight Centre. Reduced business travel to the US could significantly impact North American airlines, domestic and cross-border hospitality industries, and tourism services, as SMEs account for a substantial portion of these bookings. Proper planning and robust travel management strategies will be critical for businesses responding to these shifts.
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