Economists Expect Foreign Boycotts of US Products to Impact GDP

Lower sentiment for the U.S. and product boycotts sparked by tariff threats could affect the country’s GDP.

Pullbacks in tourism and in demand for U.S. products are expected to have an impact, Seeking Alpha reported Tuesday (April 1), citing findings by a Goldman Sachs research team.

The largest impact on GDP is expected to come from a pullback in tourism demand, according to the report. A 10% pullback could create a 7 basis point drag on growth, while a 20% pullback could amount to 18 basis points of drag.

Smaller impacts are expected from pullback in demand for three other categories of products: food and beverage, autos and other consumer goods, per the report. For each of those three categories, a 10% pullback in demand would create a headwind amounting to 2 or 3 basis points.

The report highlighted Canada, saying that 53% of consumers in the country said they have begun boycotting U.S. products, that most provincial alcohol monopolies have removed U.S. products from their shelves, and that Canadian food retailers have a seen a 10% increase in their sales and a corresponding decline in sales of U.S. products.

“Reports also suggest a spending hit for other consumer goods, particularly for brands which are easily identifiable as American,” Goldman Sachs economists said, per the report.

This report came a day before President Donald Trump is set to announce country-based reciprocal tariffs that will join the tariffs he has already imposed on Canada, Mexico and China, and on automobiles, steel and aluminum.

The reciprocal tariffs are designed to drive down other countries’ trade barriers by applying rates that match the tariffs each country imposes on American imports.

After enumerating some of those tariffs in a video shared Monday (March 31) on X, White House Press Secretary Karoline Leavitt said: “This makes it virtually impossible for American products to be imported into these markets, and it has put a lot of Americans out of business and out of work over the past decades. So, it’s time for reciprocity, and it’s time for a president to take historic change to do what’s right for the American people, and that’s going to take place on Wednesday.”