Cruise Stocks Sink as Commerce Secretary Says Firms Will Face US Taxes
Key Takeaways
Shares of cruise lines Royal Caribbean (
RCL
), Carnival Corporation (
CCL
), and Norwegian Cruise Line Holdings (
NCLH
) tumbled Thursday, a day after newly confirmed Commerce Secretary Howard Lutnick suggested those companies would have to begin paying U.S. taxes.
Lutnick complained in a
Fox News
interview that the ships of cruise line operators fly under the flags of various countries, not the U.S., and thus don’t pay U.S. taxes. He said, “This is going to end under Donald Trump, and those taxes are going to be paid.”
Lutnick said that because of collecting those and other tax revenues, the tax rates Americans pay will go down.
The comments came as the industry has been watching oil prices climb about 16% from their 2024 lows, and following a report from UBS indicating that bookings from California have slowed because of the wildfires there, and are down in Canada as travelers are discouraged by the strong dollar.
Despite today’s drop of at least 8% each, Royal Caribbean, Carnival Corporation, and Norwegian Cruise Line Holdings shares have been soaring on booming post-COVID travel demand.
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