The international cruise industry took a hit Thursday after new Secretary of Commerce Howard Lutnick announced that cruise lines will be required to start paying U.S. taxes.
Shares of several major cruise lines responded negatively to the strong words that forced an industry-wide selloff, with some seeing double-digit stock declines earlier in the day before recovering before at close.
Royal Caribbean shares saw the biggest drop, losing 8% of their value on the day. Norwegian (-5%). Carnival (-5%) and Viking (-3%),
Lutnick claimed cruise lines operate under international flags to avoid paying U.S. taxes, a longtime practice that the Trump administration intends to bring to a halt.
"You ever see a cruise ship with an American flag on the back? None of them pay taxes," Lutnick said in a Fox News interview. "None pay taxes ... all foreign alcohol. No taxes. This is going to end under Donald Trump, and those taxes are going to be paid."
Cruise lines have been surging in the post-COVID era after the virus devastated companies across the globe. However, concerns over rising fuel costs and the new threat of taxing cruise lines using U.S. ports have the industry on edge.
