This article has been reviewed by Wego’s editorial team to ensure that the content is up to date & accurate.
Written in collaboration with Bryan Ilman
Table of Contents
What’s going on with tariffs?
On 2 April 2025—which Donald Trump now calls “Liberation Day”—two new U.S. tariffs were announced. The first is a flat 10% tax on all imports. The second is a “reciprocal tariff” deal targeting 90 countries. Translation: if a country taxes U.S. exports (for example, if they put a tax on U.S. cars), the U.S. now hits them back with its own import tax on their goods.
Some countries got smacked harder than others, particularly those that supply everyday goods relevant to travel, like electronics, clothing, and hotel furnishings:
- Vietnam: 46% — a key exporter of textiles, shoes, and furniture
- China: Up to 145% in some categories — a major source (according to some outlets, approximately 30%) of global production of electronics, gadgets, and travel accessories.
- Bangladesh: 37% — supplies much of the world’s affordable apparel
- India: 27% — a significant supplier of electronics, pharmaceuticals, and consumer goods
Countries like Malaysia and Cambodia also saw tariff rates ranging between 24% and 49%, particularly affecting sectors such as electronics and apparel. These countries are relevant to travelers because they are key sources of imported consumer goods and hotel furnishings—items that often feature prominently in travel shopping or accommodations.
As of late April 2025, many of these tariffs remain technically in place; however, the U.S. has paused enforcement for most countries for 90 days, excluding China, provided those countries do not retaliate. The situation remains fluid, and categories affected by tariffs continue to face price volatility.
Some countries have since approved or signaled potential retaliatory tariffs on U.S. goods, further escalating global trade tensions. These countermeasures could exacerbate the economic uncertainty surrounding travel costs, particularly for U.S.-based airlines and routes.
Will flights be more expensive?
Possibly—but not immediately. These tariffs—and the counter-tariffs—affect travel-related essentials: airplane parts, hotel furniture, and electronics. When these costs rise for airlines and hotels, they may eventually be passed on to travellers.
Flight prices, meanwhile, show a more nuanced trend. Wego’s data shows that 2025 fares began rising steadily in mid-March, before the tariff announcement was made. A sharp spike appeared on 17 March, when fares reached nearly $400, far above the norm for that period in 2024. This increase is likely due to seasonal demand, tied to Ramadan and the lead-up to Eid, rather than any tariff impact.
Although fares dipped slightly in April, they remained higher than in the same month the previous year. The average fare during this period was $307.50 in 2025, compared to $299.43 in 2024—a 2.7% increase, despite significantly higher search volume. This suggests providers aren’t resorting to discounting. On the contrary, strong seasonal demand and the broader cost environment, including tariff-related pressures, may be helping airlines hold their pricing ground.
While we haven’t yet seen airfare spikes directly linked to tariffs, there is no sign of downward pressure either. If inflation persists or economic confidence wavers, providers may need to adjust—but for now, they are holding firm.
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Are people still interested to travel during this time?
Since the tariffs were announced, we took a peek at our internal flight search data to see if people were spooked. The short answer: no, not immediately.
From 24 March to 9 April, Wego’s global data showed strong double-digit growth in total travel clicks compared to the same period last year. Clicks surged especially in early April, with a whopping 95% increase on 8 April, and over 100% on 9 April. Clearly, people were still in planning mode—or at least they’re still interested.
We also looked at how click behavior moved in relation to the stock market, since economic panic can sometimes spook travelers. Turns out, even when stock indices dipped, travel interest stayed resilient. There was no obvious drop-off in searches after the tariff news broke. So, no doomsday just yet—but it’s worth watching closely.
As the cost of living rises—whether from groceries, mobile phones, or basic consumer goods—travel is often one of the first discretionary expenses to be reconsidered.
Moreover, uncertainty itself is a travel cost factor. The Trump administration’s frequent changes in tariff policy, sudden reversals, and unpredictable new directives amplify economic volatility. This unpredictability discourages travel providers from offering long-term deals and makes travelers hesitant to commit to major expenses, wary of abrupt price shifts.
While Wego’s platform data suggests sustained travel interest across key markets, some industry observers are beginning to spot early signs of softening elsewhere. Major U.S. airlines such as Delta Airlines and American Airlines have withdrawn their 2025 financial forecasts, citing uncertainty in travel demand due to the adverse effects from tariffs. Travel forecasting company Tourism Economics has also reported projected decline in inbound travel—signs that certain long-haul markets may be entering a more cautious phase. This broader unease adds another layer of complexity to the post-tariff travel landscape.
Whether this grim U.S. travel trend will be followed by other markets remains to be seen.
Could prices drop (or rise) if fewer people travel?
If everything else in life starts costing more because of these tariffs and uncertainty over financial security remains, people may start trimming their travel budgets. As Scott Hoyt, Senior Director at Moody’s Analytics, puts it, “discretionary spending is in consumers’ crosshairs right now and is going to be weaker going forward,” with rising prices and falling consumer confidence already shaping how people prioritise non-essential spending like travel. And when demand dips? Travel providers may be forced to lower prices to fill those seats and rooms.
Ironically, that could mean lower travel prices down the line. Airlines and hotels don’t like empty seats or rooms, so they might eventually offer deals to keep people coming.
And there’s another twist: if this leads to economic jitters and stock market dips, even rich travelers might pull back. Not because they can’t afford it, but because it just doesn’t feel like the right time.
How might this affect your trip experience?
Even if prices don’t jump dramatically, there could still be a noticeable change in how your trip feels overall. As travel providers navigate higher operating costs, they often start by trimming less visible perks—what some might call the ‘soft extras’ of the travel experience.
- Fewer perks from airlines or hotels
- Less generous loyalty program benefits
- Reduced availability of upgrades
- Smaller in-flight or in-room extras (cutting costs adds up!)
So while your trip may not be more expensive on paper, it could feel less rewarding or indulgent than you’re used to. The overall experience might become more no-frills, even if the price stays the same.
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Will shopping during my trip cost more?
For U.S. travelers, so long you don’t exceed $800 in your personal returning-traveler allowance, you’re safe. Anything above that, the applicable tariffs will kick in.
For everyone else not flying back into the U.S., you’re subjected to your country’s VAT/customs rule. However, prices of items abroad can fluctuate due to the ripple effects of tariffs.
For instance, Chinese exporters blocked by higher U.S. tariffs may flood markets in Europe and Asia, temporarily lowering prices for electronics like smartphones and laptops, and fashion items such as jackets, shoes, and handbags. Conversely, global brands affected by increased costs in the U.S. often spread these expenses worldwide, causing prices for certain items, including premium clothing brands and athletic footwear, to rise slightly in other regions. Additionally, some products could become pricier as supply chains shift away from China, though long-term production costs might eventually decrease
So, how might this affect your shopping experience? It depends. Staying informed about market trends and knowing your customs limits will ensure you get the most value from your shopping abroad.
How tariffs and currency shifts impact your trip budget
Beyond the direct costs of goods and services that may be influenced by tariffs, currency fluctuations also play a significant role in the actual cost of international travel for individuals. For travelers, the strength of their home currency relative to the destination currency directly impacts their purchasing power abroad. A stronger home currency means their money goes further, making everything from hotel stays and meals to souvenirs and local transport cheaper. Conversely, a weaker currency decreases purchasing power and makes travel more expensive.
This becomes particularly relevant when considering the global economic ripple effects of tariffs and trade uncertainty, which can influence exchange rates. For travelers from regions like the Middle East and North Africa (MENA) and the Gulf Cooperation Council (GCC), whose currencies are often pegged to the US dollar, the situation has specific nuances.
When traveling to the United States, the peg means their currency’s value relative to the dollar is stable, largely insulating them from USD exchange rate volatility. However, this also means they directly feel any price increases within the US, including those driven by tariffs on imported goods and services relevant to tourism. When traveling to non-US destinations, the cost for MENA/GCC travelers will align with the US dollar’s performance against the currency of their destination country.
For example, in the week following the April 2, 2025 tariff announcement, the Euro appreciated by over 5% against the USD, according to data from the European Central Bank (ECB) and XE.com currency trackers, making travel to the Eurozone slightly more affordable for dollar-pegged travelers while simultaneously raising costs for travelers with weaker currencies.
Thus, global currency movements, influenced partly by trade dynamics like tariffs, are a critical factor in overall travel affordability for many international travelers.
Do you need to adjust your travel plan now?
Travelers may be wondering what steps they can take amidst all this tariff turbulence. While the situation is still unfolding, there are a few smart, proactive moves you can make to stay ahead of any potential cost shifts or disruptions.
Here’s your travel strategy:
- Book early: If you see a fair price, grab it. Economic uncertainty makes fare trends volatile.
- Monitor prices: Prices may drop if demand slows, so use tools like Wego to monitor changes in real-time.
- Think regionally: If long-haul travel feels too pricey, explore short-haul or intra-regional getaways where your money goes further.
- Be flexible: Mid-week flights, alternative airports, or off-season destinations can offer great value right now.
Even small adjustments to your travel dates or destination can result in significant savings. Flexibility not only helps stretch your budget further but can also make for a smoother, less crowded travel experience.
It’s not time to panic—yet. Prices haven’t surged across the board, and travelers are still keen to make plans. However, if the tariffs continue to push up the cost of living, it’s likely that discretionary spending, such as travel, will take a backseat.
The WTO has warned that these tariffs could reverse global trade growth in 2025, an outlook that aligns with what many in the travel industry are already reporting. The best approach for now? Stay flexible, spend thoughtfully, and watch for potential deals as providers adjust to changing demand. With a bit of planning, you can still travel smart—even in uncertain times.
