While U.S. President Donald Trump’s reciprocal tariff policy is sending shockwaves through the global economy, new analysis suggests that, paradoxically, the U.S. tourism sector may suffer serious damage from these protectionist measures. Meanwhile, Korea could turn the crisis into an opportunity through revitalization of its domestic tourism industry. A new report released by Yanolja Research (Director: SooCheong Jang) on May 8, titled “Impact of U.S. Reciprocal Tariffs on Major Countries’ Travel Industries: Focus on Accommodation, Food & Beverage, and Air Transportation”, presents quantitative projections of tourism-related production shifts using the Global Trade Analysis Project (GTAP) model across the U.S., Korea, Japan, and the EU.
The reciprocal tariff policy announced on April 2, 2025 — which included a 145% tariff on Chinese imports and a 10% tariff on products from 70 countries including Korea (with a 90-day grace period) — is expected to deliver a significant and unintended blow to the U.S. tourism industry.
Yanolja Research modeled 10 scenarios to assess how different levels of reciprocal tariffs would impact production in tourism-related sectors. The scenarios ranged from 0% tariffs between countries to maximum reciprocal rates.
In scenarios involving high tariffs on Chinese imports, U.S. air transportation output was projected to plummet by up to -11.35%, while the accommodation and food services sector was forecast to decline by up to -1.61%. The report attributes this to a combination of falling consumer real income, shrinking international travel demand, and rising logistics costs — concluding that protectionism may backfire, structurally damaging domestic service industries without generating meaningful substitution by domestic demand.
[Figure 1] Projected Change in Output by Scenario (%): U.S. Accommodation/Food Services and Air Transportation
By contrast, Korea appears to be weathering the global trade turmoil by leveraging a rebound in domestic tourism. Even under scenarios of high U.S. tariffs, Korea’s accommodation and food services sector is projected to grow by up to +0.76%, echoing the domestic demand substitution seen during the COVID-19 pandemic when outbound travel was suppressed.
This demonstrates Korea’s resilience in domestic tourism fundamentals. However, air transportation output could decline by up to -4.58% in high-tariff scenarios, reflecting Korea’s exposure to declining inbound/outbound tourist flows and slowed international logistics. The report suggests that Korea’s aviation sector is the most vulnerable link in the country’s tourism value chain under a reshaped global travel supply network.
Yanolja Research Director SooCheong Jang commented, “While the U.S. tourism industry may suffer significant damage from its reciprocal tariffs, Korea has an opportunity to soften the blow through domestic tourism.” He continued, “That said, Korea’s aviation sector remains structurally vulnerable, and there is an urgent need for strategies such as enhancing Incheon Airport’s transfer competitiveness, diversifying air routes, and securing medium- to long-haul routes. Close coordination between government and the private sector is essential.”
[Figure 2] Projected Change in Output by Scenario (%): Korea Accommodation/Food Services and Air Transportation
The report also analyzed the impact of reciprocal tariffs on other major economies. Japan saw a slight increase in accommodation/food services output due to the weak yen but experienced a -2.65% decline in air transportation. The EU, heavily reliant on transatlantic routes, showed -2.95% in air transportation and -0.51% in accommodation/food services, reflecting weakening demand.
China may demonstrate temporary resilience due to government subsidies, but concerns were raised over the sustainability of growth, given weakening domestic demand and fiscal constraints.
Professor Kyu-Wan Choi of Kyung Hee University’s School of Hotel and Tourism Management remarked, “Tourism is not just about goods — it’s about the flow of people and experiences, making it one of the sectors most sensitive to changes in the global economic order.” He added, “This tariff shock represents a critical inflection point for Korea.”
Choi emphasized that “Now is the time for Korea to aggressively position tourism as an export-oriented industry through infrastructure innovation and K-culture-driven marketing — seizing the opportunity to become a true ‘tourism exporting country.’”
Yanolja Research warned that while stimulating domestic demand may buffer short-term shocks, tariff-related uncertainty poses a structural threat to the long-term sustainability of global tourism. The report concludes that innovation, structural reform, and international cooperation are necessary for nations to turn this crisis into the foundation of a more sustainable global tourism ecosystem.
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