Rich journey to Europe to dodge tariffs on luxurious items

Jamie and her husband are touring to Switzerland in December for a ski trip. But hitting the slopes is not the one motivator: The couple say they’re additionally attempting to sidestep steep U.S. tariffs on Swiss items.

They intend to purchase a luxurious watch — a Patek Philippe Nautilus — from the watchmaker in Geneva, Jamie mentioned, as a gift for her husband’s birthday.

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

If profitable, shopping for overseas could save them many hundreds of {dollars} relative to buying an imported Swiss timepiece. The Trump administration on Aug. 7 imposed a 39% tariff on Switzerland, among the many highest charges on this planet.

The couple say they’d been pondering of a ski getaway within the Swiss mountains for a while. But the potential for scoring a Patek watch at a hefty tax low cost “was a motivator and added bonus,” mentioned Jamie, a 42-year-old New Yorker. (She requested to make use of solely her first identify for privateness causes.)

Interest among the many prosperous to journey for tariff-busting purchasing sprees has spiked in current weeks, mentioned Erica Jackowitz, a journey advisor to rich clientele.

Switzerland — which is house to different high-end watchmakers like Rolex, Piaget and Audemars Piguet — is the highest vacation spot, she mentioned.

Other European nations like France and Italy, the place famend style manufacturers like Hermès and Prada are primarily based, have additionally emerged as sizzling spots, Jackowitz mentioned.

The European Union faces a 15% U.S. tariff on most items. That levy additionally took impact in August. (Switzerland just isn’t a part of the EU.)

The specter of European tariffs has endured since April, when President Donald Trump initially introduced “reciprocal” tariffs on the EU and Switzerland (amongst greater than 100 different nations) earlier than delaying them.

Tariffs add a brand new wrinkle to a well-worn idea: touring overseas with an eye fixed to reductions.

Many folks journey to benefit from favorable exchange rates, for example. And many Americans booked trips to Europe for Taylor Swift concerts in 2024, finding it more cost-effective to pay for airfare, hotel rooms and concert tickets abroad than to see the artist at home.

A Rolex Lady-Datejust watch in Oystersteel and Everose gold retails for $11,300, earlier than taxes. After tariffs, the identical watch is estimated to price about $15,700 — or $4,400 extra, in keeping with the FlavorCloud evaluation.

The evaluation assumes the tariff price is handed to the top shopper. Many economists consider firms will cross on not less than among the price.

Rolex spokesperson Virginie de Meuron declined to remark.

The price ticket for luxurious Swiss watches can generally swell to $500,000 or extra — during which case the potential tariff financial savings might be big, Jackowitz mentioned.

Any final financial savings could rely on elements like an merchandise’s nation of origin and duties that will have already utilized earlier than reciprocal tariffs took impact, commerce specialists mentioned.

Travelers should declare any objects they purchase overseas and convey again to the U.S., according to U.S. Customs and Border Protection.

In different phrases, vacationers aren’t supposed to maintain their purchases a secret — at which level that Swiss watch or French purse could possibly be hit with tariffs. Total duties would rely on factors like the place a selected good was acquired and manufactured, and what it is made from.

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While there are exemptions from customs duties in sure instances, particularly for lower-value objects, high-priced luxurious items would doubtless be handled precisely the identical as if shipped: topic to all regular import prices together with responsibility, tax, tariffs and costs, in keeping with commerce specialists.

“A $4,000 handbag, a $10,000 watch, you will have taxes you need to pay and they will be assessed at the border based on the declaration,” mentioned Rathna Sharad, co-founder and chief govt officer of FlavorCloud.

“There is no way around that,” she mentioned.

Ezon and Jackowitz, the journey advisors, are conscious of this potential snafu, and say they inform vacationers they need to declare their purchases. Failure to take action might danger penalties like fines, forfeiture of the merchandise and dropping membership within the Global Entry program from U.S. Customs and Border Protection.

But customs brokers do have some discretion to levy tariffs or not, commerce specialists mentioned. From a sensible standpoint, it’d even be onerous for brokers to determine if clothes or jewellery worn by a traveler was certainly a brand new buy abroad, they mentioned.

Each traveler will get a private exemption that enables them to carry again $800 value of things duty-free, in keeping with a U.S. Customs and Border Protection spokesperson. The exemption is $1,600 from the U.S. Virgin Islands, American Samoa and Guam.

Families touring collectively can mix these exemptions, the CBP spokesperson mentioned. Duties on watches and different objects are calculated primarily based on the Harmonized Tariff Schedule, contemplating parts just like the motion, case and strap, they mentioned.

The upshot for vacationers: That VAT refund might be hefty, typically more than 15%.

Getting a VAT refund yields a double profit, Sharad mentioned: Americans get a reduction courtesy of that refund, and likewise cut back any customs-related tax payments (as a result of the tax could be owed on a decrease declared worth).

Additionally, the bottom charge for merchandise is commonly cheaper abroad, Ezon mentioned.

Travelers ought to be conscious that there are certain steps to take to assert a VAT refund, specialists mentioned.

For instance, the retailer might want to present a refund type on the level of sale to vacationers, who typically must have their passports helpful. Travelers will then must course of the refund; these designated processing providers are typically out there at airports upon departure, specialists mentioned.

From a monetary standpoint, potential financial savings — whether or not on the VAT or tariffs — would wish to outweigh the general price of a visit to justify it.

But journey advisors are additionally planning experiences across the purchasing.

Jackowitz, for instance, is placing collectively a shopping-focused journey to Paris for a consumer and bundling a go to to La Galerie Dior into the itinerary.

For the New York couple touring to Geneva, getting an appointment at Patek Philippe to strive on completely different watches — together with the ski trip — was a part of the attract.

“The ability to be able to get the watch that we want at a significant discount to what it’d cost us in the U.S., and have the experience of the trip and the day of getting the watch — the combination of those things is what pushed us over the edge,” mentioned Jamie.

“I imagine it’ll be a lot of fun.”