Cruise lovers may want to keep an eye on potential price hikes, especially if Commerce Secretary Howard Lutnick’s tax proposal is implemented..
In a recent interview, Lutnick aimed at the cruise industry’s long-standing practice of registering ships in foreign countries to avoid U.S. federal income taxes. “You ever see a cruise ship with an American flag on the back?” he asked. “They have flags of, like, Liberia or Panama. None of ’em pay taxes … This is gonna end under Donald Trump.”
Most major cruise lines register their ships in countries like the Bahamas and Panama, where tax and labor laws are more favorable for businesses.
While they do contribute about $2.5 billion annually to U.S. taxes and fees, they don’t pay federal income taxes like most American businesses.
But should travelers be worried about price increases? Experts say not yet. Patrick Scholes, a cruise industry analyst, noted that similar tax proposals have been floated before but never gained traction.
However, if a tax hike occurs, cruise lines may pass those costs onto passengers or relocate more sailings to international ports to avoid U.S. taxation.
At this time, there’s no official plan, and the Department of Commerce hasn’t provided further details. For travelers, this means business as usual.
As discussions continue, staying informed about policy changes can help cruise-goers anticipate potential price shifts.
