Shares of cruise lines, including Norwegian Cruise Line, experienced a decline on February 20, 2025, after Commerce Secretary Howard Lutnick suggested the Trump administration would crack down on taxes paid by the companies. Lutnick stated on Fox News that cruise ships, which often do not fly an American flag, currently pay no taxes, and indicated this would change under Donald Trump.
Norwegian Cruise Line's shares fell 4.9% following these remarks. Analysts at Stifel Financial characterized the market reaction as a 'massive overreaction,' noting that similar political discussions about changing the cruise industry's tax structure have not progressed far in the past.
The Cruise Lines International Association responded by stating that cruise lines pay substantial taxes and fees in the U.S., totaling nearly $2.5 billion, which represents 65% of their worldwide tax payments. The industry also highlighted that foreign-flagged ships visiting the U.S. are treated reciprocally for taxation purposes as U.S.-flagged ships in foreign ports.
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