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With President Donald Trump’s announcement of a 15% tariff on European-made goods, the recreational boating industry is facing a significant challenge. The U.S. is the largest market for European yachts, and most of the world’s superyachts are built in Europe, which is now set to be impacted by the tariffs. While wealthy buyers of yachts can likely afford the additional 15%, brokers note that it will still affect buying decisions, and industry experts are already looking for ways to avoid this new cost.
Key Points:
- 15% Tariffs: The new tariffs on European yachts could disrupt the luxury yacht industry.
- Foreign Flagging Strategy: Buyers may register their yachts in foreign countries like the Cayman Islands, Malta, or Jamaica to avoid the tariffs. This involves registering the yacht in a country with U.S. agreements to enter as a visiting vessel, avoiding the 15% tariff.
- Impact on U.S. Builders: U.S. yacht manufacturers like Westport and Trinity may see increased demand, with some buyers opting for domestic yachts to circumvent the tariffs.
- Preowned Yachts: Sales of preowned yachts, which are already registered in the U.S., could rise as a result of the tariff changes.
Tariff Implications for Yacht Buyers
While many wealthy Americans buying yachts are likely to find ways around the tariffs, some buyers are already negotiating with European shipyards. The new 15% tax may encourage a shift toward foreign flagging for larger yachts, though smaller boats may still be subject to the tariffs. The yacht industry will be watching closely to see how these changes impact demand for U.S.-made yachts and preowned boats.
The Big Debate
With U.S. yacht manufacturers seeing an uptick in demand and buyers seeking solutions to avoid the tariffs, the luxury yacht market is entering a new era marked by shifting regulations and strategies. The rich have always found ways to minimize taxes, and brokers are preparing for new challenges and opportunities in the market.
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