Credit: DisneyThis week, President Donald Trump signed an order to place broad tariffs on more than 60 nations. These tariffs are not paid by manufacturers in other countries but by the companies that import those items to the United States. In turn, that cost is passed on to U.S. consumers, who could expect to see dramatic price increases on nearly all products.
According to the Yale University Budget Lab, this latest round of tariffs will cost the average American family around $3,800 annually. Those costs placed on American families will come in the form of rising costs for daily necessities.
These tariffs will impact every industry across America but could dramatically impact the travel industry. Airlines are already warning passengers to expect massive price increases coming in the next few months.
Airlines are expected to see higher costs for planes, parts, and gas. They will, in turn, pass those costs on to their customers.
Vertical Research Partners wrote:
Ultimately we see these cost increases being passed on to airlines, and the flying public, which logically will have a negative impact on passenger demand […] and airline profits.
Last month, three major American airlines announced that they are cutting their projected revenues for the first quarter of 2025 after decreased demand. They cited lower consumer confidence over fears of a recession and increased costs of items due to tariffs.
Delta, Southwest, and American all warned investors that their earnings would be down this quarter. This announcement was made before Trump’s tariffs pummelled the stocks of the three major airlines, causing them to drop 10-15 percent.
Airlines should expect a dramatic increase in new planes and parts to repair their current fleet. On Wednesday, Boeing CEO Kelly Ortbert told Congress that 80 percent of Boeing’s planes are sold outside the United States, and 20 percent of its parts are imported from other countries.
Plane maker Aibus CEO Guillaume Faury said:
Obviously there would be an increase of cost and most probably in price for the airlines, and therefore to the end customers. We are in an industry where I think tariffs will be very, very damaging. Probably more damaging to the US at first glance.
If you plan on heading to Walt Disney World or Universal Studios Orlando, you better book your flight now. Even flights are going to get exponentially more expensive now.