Apr 28, 2025
There's a long-standing tradition of Canadians crossing the border to shop at outlets and malls in the U.S.
This is especially true in Erie and Niagara County, which are located near the border and feature top shopping destinations such as the Walden Galleria Mall and the Fashion Outlets of Niagara Falls.
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But unfortunately, things have changed. Cars traveling across the border into the U.S. are down significantly in 2025, and counties like Erie and Niagara are paying the price through a drop in sales tax revenue.
In February and March of 2025, 35,619 fewer cars crossed the Peace Bridge that connects Canada to Buffalo, NY, compared to the number of cars that crossed the bridge during the same months in 2024. During the same period, 29,537 fewer cars crossed the Rainbow Bridge in Niagara Falls.
Thanks to President Trump’s ongoing trade war with Canada, Canadians seem to have significantly reduced their interest in traveling to the U.S. and the financial ramifications are hard to ignore.
Trump’s antics irk our neighbor to the north
In February, Trump announced a 25% tariff on most goods imported from Canada and Mexico. And although Trump has since initiated a 90-day pause on most of his tariffs, those levied against Canada remain in place.
In fact, Trump has reportedly floated the idea of increasing the automobile tariff against Canada, saying “they’re paying 25%, but that could go up in terms of cars.”
In March, Trump made an exception for goods imported into the U.S. that are covered under the US-Mexico-Canada Agreement (USMCA), which Trump signed during his first term as president. However, a 25% tariff on imported goods from Canada and Mexico that aren't covered under USMCA reportedly remains in effect.
And then there’s Trump’s repeated mention of Canada becoming America’s 51st state, a not-so-subtle statement that many Canadians view as a threat. Trump also routinely referred to Canada’s former Prime Minister, Justin Trudeau, as “Governor Trudeau” when the latter was still in office.
But it's not just the backlash to Trump's antics that’s had a negative effect on Canadian tourism in the U.S. In recent months, several foreigners — including a Canadian woman — have been detained while attempting to enter the United States.
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The Canadian government recently issued a warning to citizens, urging travelers to expect additional scrutiny when crossing the border while stating that American border officials have the authority to search electronic devices without justification.
These electronic devices reportedly include laptops, tablets and mobile phones, and refusal could cause said devices to be seized, travel to be delayed or entry to be denied.
With all of these factors in play, it's not a surprise that fewer Canadians are willing to come over to the U.S. to do some casual shopping.
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How the loss of cross-border traffic is hurting local communities
Unfortunately, many local border communities are suffering because of the decrease in Canadian customers.
“We want them back desperately. They are truly missed,” Sylvia Virtuoso, Town of Niagara Supervisor, shared with 7 News WKBW. “Everybody’s budgets are impacted by the sales tax revenue… The outlet mall to the Town of Niagara is the heart of the town. For all of Niagara County, it provides the majority of sales tax revenue.”
Sales tax revenue in Niagara County declined an estimated 1% in January and February, but Erie County has been hit even harder, with county executive Mark Poloncarz telling Bloomberg, “The county’s initial sales tax receipts have slipped 7% through mid-February, a $4.9 million reduction in revenue.”
The effects of this could have far-reaching consequences, as Cheektowaga Supervisor Brian Nowak told 7 News WKBW the decline in revenue would impact “not just the town, but the county too, because you collect county taxes… For our highway department in particular, a lot of the revenue comes to that department from sales taxes, about 75 cents on the dollar.”
It remains to be seen if the drop in Canadian car traffic over the border will continue, and a lot likely hinges on whether Trump and Canadian officials can come to an agreement on key trade issues. Without that, it may be difficult to restore the strong relationship that the U.S. once shared with its neighbor to the north.
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
