Implications of the President’s Muslim Travel Ban

Since the President has acknowledged that the intent of his restrictions on entry of individuals from certain countries is actually a “travel ban”, it is of interest to assess the impact on foreign travel to the United States, and consequent impact on the US economy.

Figure 1: Year-on-year growth rate of US international enplanements (blue), and world industrial production (red). Source: Bureau of Transportation Statistics, IMF World Economic Outlook, April 2017, Figure 1.1, and author’s calcuations.

Note that while the correlation is not very high, it is interesting that international enplanements (both incoming and outgoing) have trended sideways since 2016M11, even as world industrial production has risen. We will have additional insights (for March) on June 11th.

US News and World Report:

A new study finds international tourism to the U.S. has dropped in the Donald Trump era.

America’s share of international tourism saw a 16 percent decline in March when compared to the same month last year, according a data analysis released on Wednesday by Foursquare, a technology company with a focus on location intelligence.

The decline dates to October 2016, … according to the study. The decline has been steady with leisure tourism-related traffic to the U.S. falling an average of 11 percent between October and March, compared to the same period a year before.

Conversely, Foursquare analysts found tourism in the rest of the world increased 6 percent year-over-year during that same period.

Justin Fox/Bloomberg is a skeptical that we have already seen a big economic impact on the US economy, and I agree it is early to judge. On the other hand, the graph he presents on foreign spending in the US is sobering.

Source: Justin Fox, “The Trump Effect on Tourism Is Overhyped,” Bloomberg, June 2, 2017.

For context, the April 2017 figure is about 0.9 ppts of GDP.

12 thoughts on “Implications of the President’s Muslim Travel Ban

  1. PeakTrader

    The dollar appreciated in the last quarter of 2016 and didn’t decpreciate much in the first quarter of 2017.

  2. Max

    For now, it looks like noise and not a trend. Although I would expect tourism to be down because of dollar appreciation and bad press. With all that, I think I saw that Canadian travel is up which may compensate for the rest of the world not visiting.

  3. anon2

    Ahhh that would be Trump’s ‘Travel Ban’, not MUSLIM Travel Ban as you claim in the title.

    Applying the Stephen Moore standard, I guess we can say: Menzie Chinn is a liar.

    1. Menzie Chinn Post author

      anon2: Oh. Ok. I will ignore the video associated with this post. I’m sure you have deleted in your own mind a lot of stuff, including that Copernicus guy. I betcha you think employment in Kansas is actually growing!

      Now go back to dissing Senator Warren, disparaging “illegals”, etc.

      1. anon2

        Total spin, Menzie. You called the Trump’s TEMPORARY travel ban a MUSLIM travel ban. This is a lie. By the very politicized standards you so willingly apply to conservatives — you are a liar.

        1. Menzie Chinn Post author

          anon2: Oh. Ok. I think I’ll just ignore the various Federal district courts that have concluded the policy constituted a Muslim ban. So, lump in the several Federal district courts as “liars”. Actually, I’m sure you have. Now please go back to rolling your steel marbles.

  4. baffling

    it is not just the muslim travel ban. trump has already displayed no judgement in announcing edicts which directly affect the average foreign traveler. his temperament and moodiness materially impact a foreign travelers willingness to conduct us travel at this time. they are worried their three months of planning for a trip are wiped out because of his incoherent policy mistakes. unpredictability has negative consequences.

  5. person1597

    You mean that Trump is bankrupting his own brand? Somebody is going to get fired! On teevee!

  6. Dan Nile

    The travel ban went back in time to 2015 and started a flattening trend in foreign traveler spending in the US?

  7. Erik Poole

    It would be interesting to see a chart of US emplanements straddling 2001.

    Following the Sept. 11th attacks on New York City and the Pentagon, the hyper vigilant and hysterical reaction saw US border security tighten up considerably. Would-be travellers curtailed trips to the USA.

    The total cost of travelling to the USA went up after the Sept. 11th attacks. One might expect the number of visitors to the USA to decline. The bloomberg supplied graph on foreigner spending in the US hints at this.

    1. Menzie Chinn Post author

      Erik Poole: The data is online at BTS. International enplanements display sharp drops (and quick rebounds thereafter) in 2001M10 and 2003M04.

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