Shares of Carnival Corp ( CCL ) have tumbled 14.5% to $16.33 since Monday’s open as President Donald Trump’s new reciprocal tariffs sent shockwaves through global markets, stoking concerns of an economic slowdown that could hit the travel industry hard.

Why It Matters: As the world's largest cruise operator, Carnival is particularly vulnerable to economic downturns and rising operational costs—both of which are being amplified by the escalating trade war.

Operating renowned brands like Princess Cruises, Holland America Line and Seabourn, Carnival depends heavily on discretionary consumer spending and international travel.

However, with tariffs expected to drive up prices on goods and services, vacation budgets may tighten, leading to weaker cruise bookings. At the same time, higher import costs for fuel, food and ship maintenance could further squeeze profit margins.

Bigger Risks Ahead?: Beyond cost concerns, retaliatory measures from key markets—notably the European Union—pose another significant risk.

If trade tensions slow global economic growth, consumer confidence could erode, further pressuring demand for leisure travel.

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