Shares of cruise lines, including Royal Caribbean, tumbled on February 20, 2025, after Commerce Secretary Howard Lutnick suggested the Trump administration would crack down on taxes paid by the companies. Lutnick stated that foreign-flagged cruise ships do not pay U.S. taxes, implying this would change under Donald Trump.
Royal Caribbean's shares fell 7.6% following these comments. The Cruise Lines International Association responded, stating that cruise lines pay nearly $2.5 billion in taxes and fees in the U.S., representing 65% of their total worldwide tax payments.
Analysts at Stifel Financial characterized the market's reaction as a "massive overreaction," noting that similar political discussions about changing the cruise industry's tax structure have not progressed in the past. However, the potential for new tax regulations introduces uncertainty and risk for the industry.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.