Tariffs, policy whiplash strains Vt.’s service industry | Local News

Vermont’s reliance on Canadian visitors makes it uniquely sensitive to these pressures, especially in the bordering communities of the Northeast Kingdom. Predictability and affordability are critical for service industry businesses navigating staffing, supply costs, and visitor demand, officials there say.

“Vermont’s service industry is resilient and deeply embedded in local communities, but resilience requires stability. Predictable policy, strong cross-border relationships, a reliable workforce, and cost reform will determine whether these businesses can continue to thrive,” said Amy Spear, president of the Vermont Chamber of Commerce.

In May 2025, many industry leaders expressed concern about declining tourism in Vermont, particularly as bookings for the upcoming winter season fell short of past years.

Businesses such as Jay Peak Resort and other Northeast Kingdom operators reported noticeable drops in reservations and increased cancellations, especially among longtime Canadian visitors.

When winter arrived, however, a robust early snowfall, combined with local support and increased domestic travel, helped Vermont’s service and tourism activity rebound from earlier in the year.

Steve Wright, president and general manager of Jay Peak Resort reported: “During May through October, we saw about a 30% reduction in Canadian business. The U.S. side of business was actually up 20%, which helped offset that decline. Once the snow started in November, Canadians began booking again. With nearly 320 inches of snow since Nov. 1, Canadian visitation is now only about 10% off.”

“You can hear the difference because you don’t have the French Canadian voice in the room, and their personality is missing,” said Mike Sardina, bar manager at Parker Pie Company in Glover.

While Parker Pie and Jay Peak cited a modest recovery and strategies for adjusting to obstacles, industry leaders say the rebound may not be enough to keep most businesses profitable. Especially in areas closest to the Canadian border, pressures tied to shifting federal policies on trade and immigration, rising operating costs, and strained cross-border relations affect everything from visitor traffic to staffing and planning.

“The tourism industry here acts a little differently than in other states. Because of its size and location, Vermont tends to be a little more resilient to the boom-and-bust cycles,” said Mat Barewicz, director of the economic and labor market information division for the Vermont Department of Labor. “People often think of tourism as luxury, but what we’ve seen is there’s actually a lot of demand, even during bad economic times. Historically, when the dollar was strong, we would get travelers from all over the U.S. and internationally. When it was weak, we saw an inbound of Canadian travel, making up the difference as it was more cost-effective for them.” While state officials don’t have the full set of statistics for 2025 yet, it seems apparent things have shifted. Barewicz said current reports indicate a 40% reduction in Canadian traffic, travel and visitation in Vermont, with some northeastern towns citing declines of up to 80%.

Given the history of Vermont’s Canadian-bordering towns catering to their northern neighbors, this has hit Northeast Kingdom businesses especially hard.

Tariffs and shifting trade policies are contributing to rising operating costs across Vermont. Local businesses and producers reported higher prices for day-to-day supplies, from plates, silverware and kitchen equipment used in food preparation, brewing, and other service-industry operations, to ingredients sourced from local and international producers.

Additionally, the rhetoric and overall climate have been devastating for many small businesses. Industry leaders say they feel the most concerning aspect is the lack of predictability due to rapidly shifting laws.

“Uncertainty around trade and immigration directly affects tourism demand, consumer confidence, and hiring decisions,” Spear said, adding that service-sector employers also face rising costs in health care, housing, and labor.

Spear said she feels long-term structural reform is needed to ease those pressures.

Gillian Sewake, director of Discover St. Johnsbury, said much of the issue stems from what’s been described as “51st state rhetoric”: U.S. political commentary suggesting Canada is economically dependent on, or jokingly should become, the 51st state. While not tied to formal policy, the talk received widespread coverage, especially in Canadian media last year. Vermont tourism experts say the discourse, often surfacing alongside tougher trade or tariff messaging, likely has contributed to hesitation among some Canadian travelers considering trips to the U.S.

Rick Ufford-Chase, executive director of Newport Downtown Development, said, “This (51st state rhetoric) is probably the biggest negative in our community. The utter disregard for basic standards of polite behavior and the outright disrespect for Canadians and juvenile name-calling targeting their leaders has had a significant impact on the number of visitors we are receiving from Canada. This has affected our retail on Main Street, our restaurants, and most importantly, our families as they have found it much more difficult to see one another given the level of anger and distrust intentionally sown by the U.S. President.”

Wright echoed this sentiment: “Having the federal administration put some distance between the last ‘51st state’ talk and current policy has helped. The Canadian relationship has stabilized somewhat, and we’re seeing more Canadians interested in visiting than four or five months ago.”

“We know first-hand that this talk has changed Canadian visitation patterns,” Sewake said. “Here at the St. Johnsbury Welcome Center, we typically see about 10% of our annual visitation from Canada. Now we’re down to 3% to 4%. This is an even bigger issue in communities like Newport and East Burke, which traditionally see a much higher percentage of Canadian visitors.”

Catherine Davis, president and CEO of Lake Champlain Chamber said, “Travelers get to choose where to vacation and where to spend that money. Many Canadians have chosen not to visit the United States as a result of both the tariffs and what is seen as a lack of respect for their country.”

Georgia Gould, interim executive director of Kingdom Trail Association in East Burke, confirmed that observation, citing a 50% decline in Canadian visitation.

International issues are not only affecting tourism.

“Workforce availability is Vermont’s most significant structural economic challenge,” said Spear. “Hospitality, food service, and retail sectors depend on a reliable workforce, including authorized immigrants. Uncertainty in immigration policy or heightened enforcement can make even legally authorized workers hesitant to stay, relocate, or participate fully.”

“Despite high demand, there are still nearly two job openings for every unemployed person in the state, underscoring the difficulty service businesses face in filling positions,” said Barewicz from the state. “Over the last 10 years, about 75% to 80% of Vermont’s total net migration has been driven by people moving here from other countries. If that inbound traffic drops off, it impacts our population going forward, which has a ripple effect on the labor force and ultimately on people filling jobs.”

Recent rulings have complicated things further. Earlier this month, the U.S. Supreme Court struck down broad tariffs imposed under emergency authority. In the weeks since, President Trump has cited a separate legal ruling to implement new tariffs, creating more confusion and tension once again.

The legal back-and-forth has drawn criticism from state officials.

Ahead of the State of the Union address, Vermont Treasurer Mike Pieciak, along with other state fiscal officers, called on Trump to comply with the Supreme Court ruling and halt broad-based tariffs without congressional approval, citing that most tariff costs are borne by U.S. businesses and consumers.

In Vermont, that amounts to nearly $300 million in additional household costs in 2025 alone.

“Despite the recent Supreme Court ruling, businesses still face uncertainty from tariffs and the long-term effects on trade relationships,” Davis said. “Businesses value certainty and predictability as it allows them to plan, to invest and to take risks that improve our economy. Vermont businesses play on an increasingly global stage, and on-and-off tariffs are a major obstacle to advancing our state’s economy.”

Jay Peak’s Wright said he feels an attempt to mend fences is necessary to sustain business.

“I’m less concerned about Canadian visitation than I was in May, but it’s tough to know what will happen if political rhetoric heats up again,” Wright said. “Canadians may continue to return if the narrative stays neutral. Any movement by the administration to mend fences and be good neighbors would help, including neutralizing tariffs and working through issues directly rather than airing them in the media.”

The service industry is still finding resiliency through community.

“It’s an ecosystem that thrives when it’s working together, not when it’s set apart,” said Brian Maggiotto, executive director of the Vermont Lodging Association and owner/operator of the Inn at Manchester. “We can’t only invest in our larger towns and cities. We have to start looking at our quieter corners of the state; it’s not a one-size-fits-all experience when you come to Vermont. We need everybody to thrive so that we can collectively offer the best possible experience.”

In Montpelier, businesses there have made concerted efforts to let Canadians know they are welcome, extending discounts through coupon booklets publicized across Vermont and Quebec and showcasing Canadian flags outside businesses and at cash registers.

“All businesses are very unified in trying to message Canada that we welcome them back and that we are friendly neighbors,” said Katie Trautz, executive director of Montpelier Alive.

Wright said Jay Peak Resort has always fostered good relations with its neighbors.

“We’ve always offered Canadians par pricing on lift tickets and other products, effectively giving them about a 30% discount because of currency conversion. We’ve done this for 40 years to maintain a strong relationship and make it easier for them to visit.”

Sardina echoed this sentiment: “A leadership team that brings flexibility and a willingness to adapt keeps Parker Pie moving forward when other businesses may be stagnant or receding. We lead by example and adapt when obstacles arise.”