Howard William Lutnick (US Commerce Secretary since February 19th) indicated that President Trump intends to enforce stricter tax regulations on large cruise shipping companies such as RCI-Royal Caribbean International and NCL-Norwegian Cruise Line, asserting that these companies do not contribute to U.S. taxes.
During an appearance on Fox News, Lutnick suggested that the federal government would take action against cruise lines that register their vessels in foreign jurisdictions with more lenient tax policies, despite maintaining headquarters in the United States. He emphasized that many major cruise operators, while based in Miami (Florida) are incorporated elsewhere - Royal Caribbean in Liberia, NCL in Bermuda, and Carnival Corporation in Panama.
Lutnick further remarked that the absence of USA-flagged cruise vessels reflects the industry's tax practices, stating that changes under the Trump administration would ensure these companies contribute to the USA's tax system.
He suggested that increased tax payments from cruise operators could lead to lower tax rates for American citizens.
His statements prompted an immediate market reaction, leading to a decline in stock prices for Royal Caribbean, NCL, and Carnival Corporation. The Cruise Lines International Association (CLIA) swiftly responded to the remarks, signaling potential industry pushback:
“Cruise lines pay substantial taxes and fees in the US – to the tune of nearly $2.5 billion, which represents 65 per cent of the total taxes cruise lines pay worldwide, even though only a very small percentage of operations occur in US waters.
“Foreign flagged ships that visit the US are treated the same for taxation purposes as US flagged ships visiting foreign ports, which provides consistent reciprocal treatment across international shipping.”