Nevada’s golden goose – the hospitality industry – could get cooked as a result of President Donald Trump’s protectionist trade policies, some experts fear. On Tuesday, Trump imposed 25% tariffs on goods imported from its two top trade partners – Canada and Mexico. An additional 10% levy on imports from China went into effect last month, on top of existing tariffs.
“I am gravely concerned that our tourism workers will face layoffs from the Trump tariffs,” Rep. Dina Titus, a Democrat from Southern Nevada, said Wednesday.
Federal tax revenue is projected to increase by $142 billion as a result of the tariffs on imported goods, amounting to an average increased cost of $1,072 per U.S. household, according to the Tax Foundation.
The policy is at odds with Trump’s promise, as a candidate and after taking office in his second term, to lower costs for inflation-weary Americans.
The tariffs will have an “immediate impact on the cost of imported household items, groceries, and essentials critical for Nevada families,” Bryan Wachter of the Nevada Retail Association said in a statement Tuesday that urged the Trump administration and trade partners to find alternative solutions without burdening families and businesses.
The “little disturbance” to the economy forecasted by Trump on Tuesday could render a Las Vegas vacation out of reach for tourists, and slash disposable income for residents, many of whom earn their living in hotels, restaurants, and retail establishments.
“The Trump tariffs will lead to an international economic slowdown,” said Titus. “Las Vegas knows well that when there is a downturn, we are the first to feel the impacts and the last to recover, and if prices are higher in the United States, as anticipated, people will not have money in their pocket to go on holiday.”
More than half of international visitation to Southern Nevada, still on the mend from the pandemic, comes from Canada and Mexico.
The president alleges the countries have not done enough to curb the flow of fentanyl across the borders.
In Fiscal Year 2024, U.S. Customs and Border Protection agents seized 43 pounds of fentanyl at the Canadian border, and have seized 10 pounds so far this fiscal year. By contrast, authorities seized 21,000 pounds at the southern border in FY 24, and 5,400 pounds in the current fiscal year.
“Trump’s Tariffs are a direct attack on the workers who power Nevada’s economy: Hospitality workers, construction workers, and agricultural workers,” Culinary Local 226 Secretary-Treasurer Ted Pappageorge said in a news release Tuesday. “Closing the border, deporting 11 million undocumented workers who help power the greatest economy in the world, and enacting reckless tariffs will blow up our economy and push us into a recession.”
Canadian Prime Minister Justin Trudeau called Trump’s actions a “very dumb move,” and accused the president of plotting “a total collapse of the Canadian economy because that will make it easier to annex us,” the BBC reported Tuesday. “That is never going to happen. We will never be the 51st state.”
More than 40% of U.S. imports come from Mexico, Canada, and China according to Census data. Nevadans buy more than $3 billion in goods from Mexico and Canada annually, says a news release from U.S. Sen. Catherine Cortez Masto, a Democrat.
“President Trump says he is standing up for American families and workers, but these tariffs on our allies will raise prices and cost the U.S. as many as 400,000 blue-collar jobs,” Cortez Masto said in a statement. “Make no mistake, President Trump’s actions are going to jack up the cost of groceries, medicine, and new cars, and could make buying a new home more than $20,000 more expensive, all to pay for tax cuts for his wealthy friends.”
Axios estimates an effective increase of 153% in Nevada for the cost of imported goods, compared with existing tariffs, and an annual economic impact to the state of $985 million, about .5% of the state’s gross domestic product.
Gov. Joe Lombardo did not respond to requests for comment on the potential impact of Trump’s tariffs.
A menu in flux
American diners are coming to terms with higher food prices, says Nevada Restaurant Association Government Affairs and Communications Manager Peter Saba, who suggests eateries can minimize the impact of tariffs by tweaking their menus, substitute ingredients if necessary, or maybe add a small surcharge rather than increase prices across the board.
In 2023, Mexico supplied 63% of vegetable imports and 47% of fruit and nuts to the U.S.
“In Nevada, we rely on a substantial portion of produce, seafood, and alcoholic beverages from Mexico and Canada. Those will be some of the first things that get hit,” Saba says, adding that domestic sourcing is often not a realistic option. “Certain ingredients aren’t in season year round as it is, even in some of these other places we import from.”
A greater concern than increasing prices, he says, is the prospect that “people will just stay away. A lot more people are already not eating out because of inflation. With tariffs on top of that, I think we’re most worried they just won’t come.”
Paul Lagudi of Lagudi Fresh Food Group, a full service food company serving resorts in Las Vegas and nationwide, says he doesn’t anticipate a slow down in tourism, or increase in the cost of produce to his clients.
“We might have to buy produce from different regions instead of Mexico and Canada,” Lagudi says, adding that switching sources doesn’t mean higher prices. “Not at all. We pull out of Guatemala and Costa Rica every day.”
The produce business, he says, is “all about supply and demand. You can put on any tariff you want. At the end of the day, If nobody’s buying the product, you ain’t selling the product. You know what happens? They start dropping their prices. They’re going to start calling up and saying, ‘Listen, can you help me out? Instead of paying $20 or $30, can you take it for $10?’ That’s when we’ll come in and buy it.”
As of Tuesday, the price of watermelon from Mexico was already headed toward a 25% price increase.
“I said ‘keep your watermelon. I’ll pull from Costa Rica, and I’ll pay $100 a bin less,” Lagudi said.
A change in plans?
The Nevada Resort Association says it’s too soon to determine the potential impacts of Trump’s tariffs on the casino industry, but is “closely monitoring” developments.
Tourists from Canada and Mexico have topped international visitation to Southern Nevada every year since 2010, with 30% of tourists originating from Canada and 22% from Mexico in 2023.
In 2023, visitation to Southern Nevada from the two countries reached 2.4 million – a rebound following a post-COVID slump, but far below the 2014 peak of 2.99 million.
Las Vegas Convention and Visitors Authority chief Steve Hill did not respond to requests for comment on whether the tariffs are likely to pose a setback in efforts to lure international visitors.
Travel Nevada, the state’s tourism office, said it may be too early to determine the effects of the tariffs.
“Now is also the time to choose Canada,” Trudeau, annoyed by Trump’s threats to annex Canada and impose tariffs, said in a speech this month. “It might mean changing your summer vacation plans to stay here in Canada and explore the many national and provincial parks, historical sites and tourist destinations our great country has to offer.”
“People are cancelling trips to Las Vegas, Hawaii and Florida. They don’t feel welcome in America,” says British Columbia resident Rhonda Porter, who has been visiting Las Vegas since she was a child. She says Canadians are irked not only by Trump’s trade war, but also by his desire to turn Canada into a state.
“We’ve gotten rid of all of our liquor from the red states,” said Porter. “No Kentucky bourbon.”
The Liquor Control Board of Ontario ordered U.S. products removed from shelves in its retail stores, the Louisville Courier-Journal reported.
Canadian tourists spent $20.5 billion in the U.S. last year, the New York Times reports.
“The top 5 most visited states by Canadians—Florida, California, Nevada, New York and Texas—could see declines in retail and hospitality revenue, as shopping is the top leisure activity for Canadian visitors,” says the U.S. Travel Association.
“If we raise prices on Canadians and Mexicans, the first thing they will cut is travel,” Titus said. ”That will have serious effects on our economy. Last year, seven of the top eight foreign markets for air travel to Las Vegas were in Canada and Mexico.”
Gas prices are also expected to increase because of tariffs on Canadian oil, Titus said. “And housing prices will skyrocket as construction materials get more expensive.”
On Wednesday, the White House delayed the imposition of tariffs on imports for U.S. car manufacturers for one month; deemed Canada’s efforts to meet Trump’s border security demands as “not good enough,”; and doubled down on the president’s warning that beginning April 2, the U.S. will impose reciprocal tariffs on all countries that place tariffs on U.S. products.
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