Simon Malls See Traffic Dip as Canada-US Tensions Rise

Simon Property Group, the largest mall operator in the United States, is reporting a decline in shopper traffic at several properties near the US-Canada border, highlighting how geopolitical tension and trade policy can ripple directly into brick-and-mortar retail performance.

According to Simon executives, mall locations that historically benefited from strong cross-border traffic are seeing fewer Canadian shoppers as tariffs, heightened border scrutiny, and growing political friction weigh on travel decisions. The issue was raised during recent earnings commentary, where leadership acknowledged that border dynamics are now a measurable factor in retail foot traffic.

Cross-Border Shopping Slows

Canadian shoppers have long played an important role in the performance of northern US malls, particularly in states such as New York, Michigan, and Washington. Favorable exchange rates and product availability have historically driven Canadians to shop across the border, supporting sales at outlet centers and enclosed malls alike.

That pattern is now shifting. Simon executives pointed to frustration among Canadian consumers tied to tariffs and increased encounters with US border enforcement agencies, including ICE and US Border Patrol. These factors have reportedly contributed to fewer discretionary trips into the United States, reducing mall visits in border-adjacent markets.

Retail Dive reported that Simon leadership described some Canadians as being angry about tariffs and border treatment, which is influencing shopping behavior. The decline is not uniform across the portfolio but is concentrated in locations that previously relied heavily on international visitors.

Tariffs Create Retail Side Effects

The traffic decline illustrates a less-discussed consequence of trade policy. While tariffs are often evaluated through manufacturing costs and supply chain disruption, their secondary effects can reach physical retail demand, tourism, and local economies.

For mall operators like Simon, international shoppers often generate higher average transaction values and support premium and luxury tenants. Reduced cross-border traffic can therefore impact tenant sales productivity, leasing dynamics, and overall property performance.

Simon noted that domestic shopper traffic remains stable in most regions, suggesting the issue is geographically specific rather than systemic. Still, executives acknowledged that prolonged trade disputes could create sustained pressure in affected markets.

Implications for Retailers and Brands

Retailers operating in border-region malls may need to adjust marketing, inventory, and staffing strategies as cross-border demand softens. Some brands that traditionally catered to Canadian shoppers may see slower sales or need to rebalance store-level forecasts.

The situation also underscores the growing interconnection between government policy and omnichannel retail performance. Even as retailers invest in digital commerce and fulfillment, physical locations remain exposed to external factors such as travel sentiment, border enforcement, and diplomatic relations.

Broader Context for Mall Operators

Simon Property Group has continued to report strong overall portfolio performance, supported by high occupancy rates, experiential tenants, and a diversified tenant mix. The border-related slowdown represents a localized headwind rather than a threat to the company’s national outlook.

However, the development serves as a reminder that retail real estate performance is increasingly influenced by macroeconomic and geopolitical variables beyond traditional consumer spending indicators.

Conclusion

The decline in mall traffic near the US-Canada border highlights how tariffs and border enforcement policies can influence consumer behavior in unexpected ways. For Simon Property Group and its retail tenants, the challenge now is navigating localized demand shifts while maintaining momentum across a broader, resilient portfolio.

As trade and diplomatic dynamics continue to evolve, border-region retail markets may remain a bellwether for how international policy decisions translate into real-world retail outcomes.