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shot across the bow

Cruise stocks sink after tax warning from US commerce secretary

Cruise stocks hit choppy waters as investors fear operators could soon face more taxes.

2/20/25 11:17AM

Cruise stocks tumbled on Thursday following remarks from US Commerce Secretary Howard Lutnick, who suggested that cruise operators could soon be required to pay taxes (likely to the newly minted External Revenue Service).

Shares of Royal Caribbean dropped more than 11%, Norwegian Cruise Line and Carnival both fell around 9%, and Viking Holdings slid 3%.

Lutnick, speaking on Fox News late Wednesday, pointed to the longstanding practice of cruise companies registering their ships under foreign flags to avoid US taxes. “You ever see a cruise ship with an American flag on the back? They have flags of like, Liberia or Panama. None of them pay taxes,” he said. “This is going to end under Donald Trump.”

Cruise companies have thrived in recent years, reporting record bookings and higher revenues per passenger as more Americans set sail. The commerce secretary’s comments sparked investor concerns over potential tax liabilities for the cruise industry, which has historically benefited from operating outside the US tax system.

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