Wealthy Americans are traveling to Europe to dodge tariffs on luxury goods

Jamie and her hubby are traveling to Switzerland successful December for a skis vacation. But hitting the slopes isn't the lone motivator: The mates accidental they are besides trying to sidestep steep U.S. tariffs connected Swiss goods.

They mean to bargain a luxury ticker — a Patek Philippe Nautilus — from the watchmaker successful Geneva, Jamie said, arsenic a contiguous for her husband's birthday.

Their fund for the watch: $50,000 to $75,000.

If successful, buying overseas whitethorn prevention them galore thousands of dollars comparative to purchasing an imported Swiss timepiece. The Trump medication connected Aug. 7 imposed a 39% tariff connected Switzerland, among the highest rates successful the world.

The mates accidental they had been reasoning of a skis getaway successful the Swiss mountains for immoderate time. But the anticipation of scoring a Patek ticker astatine a hefty taxation discount "was a motivator and added bonus," said Jamie, a 42-year-old New Yorker. (She asked to usage lone her archetypal sanction for privateness reasons.)

Interest among the affluent to question for tariff-busting buying sprees has spiked successful caller weeks, said Erica Jackowitz, a question advisor to affluent clientele.

Switzerland — which is location to different high-end watchmakers similar Rolex, Piaget and Audemars Piguet — is the apical destination, she said.

Other European nations similar France and Italy, wherever renowned manner brands similar Hermès and Prada are based, person besides emerged arsenic blistery spots, Jackowitz said.

The European Union faces a 15% U.S. tariff connected astir goods. That levy besides took effect successful August. (Switzerland is not portion of the EU.)

The specter of European tariffs has persisted since April, erstwhile President Donald Trump initially announced "reciprocal" tariffs connected the EU and Switzerland (among much than 100 different countries) earlier delaying them.

Tariffs adhd a caller wrinkle to a well-worn concept: traveling overseas with an oculus to discounts.

Many radical question to instrumentality vantage of favorable speech rates, for example. And galore Americans booked trips to Europe for Taylor Swift concerts successful 2024, uncovering it much cost-effective to wage for airfare, edifice rooms and performance tickets overseas than to spot the artist at home.

"That truly acceptable disconnected people's mindsets that you tin get things astatine amended prices successful antithetic places," said Jack Ezon, a luxury question advisor based successful New York.

He's seen the stock of shopping-centric trips among his clientele leap 48% this summertime comparative to 2024.

Italy, Milan, Paris and Madrid person been the apical destinations, said Ezon, laminitis and managing spouse of Embark Beyond. Fashion and watches are the apical draws, helium said.

"Every dollar counts erstwhile you're getting these kinds of tariffs," Ezon said.

Take the illustration of an imported Rolex arsenic an illustration of imaginable outgo savings, according to an investigation by FlavorCloud, a cross-border logistics firm.

A Rolex Lady-Datejust ticker successful Oystersteel and Everose golden retails for $11,300, earlier taxes. After tariffs, the aforesaid ticker is estimated to outgo astir $15,700 — oregon $4,400 more, according to the FlavorCloud analysis.

The investigation assumes the tariff outgo is passed to the extremity consumer. Many economists believe companies volition walk connected astatine slightest immoderate of the cost.

Rolex spokesperson Virginie de Meuron declined to comment.

The terms tag for luxury Swiss watches tin sometimes swell to $500,000 oregon much — successful which lawsuit the imaginable tariff savings tin beryllium huge, Jackowitz said.

Any eventual savings whitethorn beryllium connected factors similar an item's state of root and duties that whitethorn person already applied earlier reciprocal tariffs took effect, commercialized experts said.

Of course, the gambit could backfire.

Travelers indispensable state immoderate items they get overseas and bring backmost to the U.S., according to U.S. Customs and Border Protection.

In different words, travelers aren't expected to support their purchases a concealed — astatine which constituent that Swiss ticker oregon French handbag could beryllium deed with tariffs. Total duties would beryllium connected factors like wherever a peculiar bully was acquired and manufactured, and what it's made of.

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While determination are exemptions from customs duties successful definite cases, particularly for lower-value items, high-priced luxury goods would apt beryllium treated precisely the aforesaid arsenic if shipped: taxable to each mean import costs including duty, tax, tariffs and fees, according to commercialized experts.

"A $4,000 handbag, a $10,000 watch, you volition person taxes you request to wage and they volition beryllium assessed astatine the borderline based connected the declaration," said Rathna Sharad, co-founder and main enforcement serviceman of FlavorCloud.

"There is nary mode astir that," she said.

Ezon and Jackowitz, the question advisors, are alert of this imaginable snafu, and accidental they archer travelers they should state their purchases. Failure to bash truthful could hazard penalties similar fines, forfeiture of the point and losing rank successful the Global Entry program from U.S. Customs and Border Protection.

But customs agents bash person immoderate discretion to levy tariffs oregon not, commercialized experts said. From a applicable standpoint, it'd besides beryllium hard for agents to ascertain if covering oregon jewelry worn by a traveler was so a caller acquisition overseas, they said.

Each traveler gets a idiosyncratic exemption that allows them to bring backmost $800 worthy of items duty-free, according to a U.S. Customs and Border Protection spokesperson. The exemption is $1,600 from the U.S. Virgin Islands, American Samoa and Guam.

Families traveling unneurotic tin harvester these exemptions, the CBP spokesperson said. Duties connected watches and different items are calculated based connected the Harmonized Tariff Schedule, considering components similar the movement, lawsuit and strap, they said.

Travel agents and customs experts accidental determination are inactive merits to buying European luxury goods overseas, adjacent if they are slapped with tariffs upon reentry to the U.S.

Largely, that's due to the fact that of refunds that American travelers tin get connected the area's value-added tax.

The upshot for travelers: That VAT refund tin beryllium hefty, often much than 15%.

Getting a VAT refund yields a treble benefit, Sharad said: Americans get a discount courtesy of that refund, and besides trim immoderate customs-related taxation bills (because the taxation would beryllium owed connected a little declared value).

Additionally, the basal complaint for merchandise is often cheaper overseas, Ezon said.

Travelers should beryllium alert that determination are certain steps to instrumentality to assertion a VAT refund, experts said.

For example, the retailer volition request to supply a refund signifier astatine the constituent of merchantability to travelers, who mostly request to person their passports handy. Travelers volition past request to process the refund; these designated processing services are mostly disposable astatine airports upon departure, experts said.

From a fiscal standpoint, imaginable savings — whether connected the VAT oregon tariffs — would request to outweigh the wide outgo of a travel to warrant it.

But question advisors are besides readying experiences astir the shopping.

Jackowitz, for example, is putting unneurotic a shopping-focused travel to Paris for a lawsuit and bundling a sojourn to La Galerie Dior into the itinerary.

For the New York mates traveling to Geneva, getting an assignment astatine Patek Philippe to effort connected antithetic watches — on with the skis abrogation — was portion of the allure.

"The quality to beryllium capable to get the ticker that we privation astatine a important discount to what it'd outgo america successful the U.S., and person the acquisition of the travel and the time of getting the ticker — the operation of those things is what pushed america implicit the edge," said Jamie.

"I ideate it'll beryllium a batch of fun."