MONTPELIER — The Vermont Legislature’s top economist called President Donald Trump’s trade war with Canada and Trump’s disparaging rhetoric toward the country a “costly unforced error” that is putting pressure on the state’s budget at an already challenging time.

Tom Kavet was speaking to members of the Vermont House and Senate at a briefing Wednesday in Montpelier on some of the major issues legislators will face when they reconvene for the 2026 legislative session, which starts the second week of January.

Kavet said a drop in visitors from Canada this year compared to years past — something that is a direct result of Trump’s actions — has meant less tax revenue is being collected from tourists to support state services. That’s likely to make it harder for legislative leaders, working with Gov. Phil Scott’s administration, to balance the books when they start developing a new state budget next month, Kavet said. 

At the same time, top legislators have already pointed to how rising costs at home and shrinking federal support for key social services could force them to trim other programs and initiatives that residents rely on, though they have not yet proposed specific cuts.

Traffic at Vermont’s welcome and visitor centers was down 9% between January and mid-November 2025 compared to the same period in 2024, according to data Kavet presented Wednesday. Most of those centers are situated on or near Interstates 89 and 91.

At the centers located closest to Canada — in Alburgh and Derby Line — the drop between those time periods was far higher, about 36%, data shows. At centers located slightly farther south, including in Georgia and Lyndonville, the drop was about 18%.

Meanwhile, data from U.S. Customs and Border Protection shows that traffic into the U.S. at border crossings in Vermont fell below 2024 levels immediately after Trump took office in January 2025, and has remained below 2024 levels every month since.

In October 2025, cross-border traffic — which includes cars, trucks, pedestrians, and airplanes — was down about 22% compared to October 2024, federal data shows. 

Kavet called the decline in cross-border visitors this year “needless.” 

Kavet is the president and co-founder of a Williamstown consulting firm that provides fiscal analyses guiding Vermont’s state budget-building process each year.

“I say needless just because you can apply tariffs on whoever you want, but if you want to rub it in somebody’s face and nose, you’re going to get reactions like this,” he said. “And it just doesn’t help when it comes to revenue that we’re wanting — and needing.”

The decline in traffic comes as Vermont has brought in less tax revenue from hotel room rentals and purchases at restaurants and bars than the state was expecting, Kavet said.

Meals and rooms tax revenue landed about 2% below October targets, according to the latest data from the state Agency of Administration. The amount the state put into its education fund from that same tax was about 4% below officials’ targets, according to the data.

Meanwhile, between January and the end of October 2025, the data shows meals and rooms tax collections were about 1% lower than they were over the first 10 months of 2024.