Wealthy travel to Europe to dodge tariffs on luxury goods

Jamie and her husband are traveling to Switzerland in December for a ski vacation. But hitting the slopes isn’t the only motivator: The couple say they are also trying to sidestep steep U.S. tariffs on Swiss goods.

They intend to buy a luxury watch — a Patek Philippe Nautilus — from the watchmaker in Geneva, Jamie said, as a present for her husband’s birthday.

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

If successful, buying abroad may save them many thousands of dollars relative to purchasing an imported Swiss timepiece. The Trump administration on Aug. 7 imposed a 39% tariff on Switzerland, among the highest rates in the world.

The couple say they had been thinking of a ski getaway in the Swiss mountains for some time. But the possibility of scoring a Patek watch at a hefty tax discount “was a motivator and added bonus,” said Jamie, a 42-year-old New Yorker. (She asked to use only her first name for privacy reasons.)

Interest among the affluent to travel for tariff-busting shopping sprees has spiked in recent weeks, said Erica Jackowitz, a travel advisor to wealthy clientele.

Switzerland — which is home to other high-end watchmakers like Rolex, Piaget and Audemars Piguet — is the top destination, she said.

Other European nations like France and Italy, where renowned fashion brands like Hermès and Prada are based, have also emerged as hot spots, Jackowitz said.

The European Union faces a 15% U.S. tariff on most goods. That levy also took effect in August. (Switzerland is not part of the EU.)

The specter of European tariffs has persisted since April, when President Donald Trump initially announced “reciprocal” tariffs on the EU and Switzerland (among more than 100 other countries) before delaying them.

Tariffs add a new wrinkle to a well-worn concept: traveling abroad with an eye to discounts.

Many people travel to take advantage of 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.

“That really set off people’s mindsets that you can get things at better prices in different places,” said Jack Ezon, a luxury travel advisor based in New York.

He’s seen the share of shopping-centric trips among his clientele jump 48% this summer relative to 2024.

Italy, Milan, Paris and Madrid have been the top destinations, said Ezon, founder and managing partner of Embark Beyond. Fashion and watches are the top draws, he said.

“Every dollar counts when you’re getting these kinds of tariffs,” Ezon said.

Take the example of an imported Rolex as an illustration of potential cost savings, according to an analysis by FlavorCloud, a cross-border logistics firm.

A Rolex Lady-Datejust watch in Oystersteel and Everose gold retails for $11,300, before taxes. After tariffs, the same watch is estimated to cost about $15,700 — or $4,400 more, according to the FlavorCloud analysis.

The analysis assumes the tariff cost is passed to the end consumer. Many economists believe companies will pass on at least some of the cost.

Rolex spokesperson Virginie de Meuron declined to comment.

The price tag for luxury Swiss watches can sometimes swell to $500,000 or more — in which case the potential tariff savings can be huge, Jackowitz said.

Any ultimate savings may depend on factors like an item’s country of origin and duties that may have already applied before reciprocal tariffs took effect, trade experts said.

Of course, the gambit could backfire.

Travelers must declare any items they acquire abroad and bring back to the U.S., according to U.S. Customs and Border Protection.

In other words, travelers aren’t supposed to keep their purchases a secret — at which point that Swiss watch or French handbag could be hit with tariffs. Total duties would depend on factors like where a particular good was acquired and manufactured, and what it’s made of.

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While there are exemptions from customs duties in certain cases, especially for lower-value items, high-priced luxury goods would likely be treated exactly the same as if shipped: subject to all normal import costs including duty, tax, tariffs and fees, according to trade experts.

“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,” said Rathna Sharad, co-founder and chief executive officer of FlavorCloud.

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

Ezon and Jackowitz, the travel advisors, are aware of this potential snafu, and say they tell travelers they should declare their purchases. Failure to do so could risk penalties like fines, forfeiture of the item and losing membership in the Global Entry program from U.S. Customs and Border Protection.

But customs agents do have some discretion to levy tariffs or not, trade experts said. From a practical standpoint, it’d also be hard for agents to ascertain if clothing or jewelry worn by a traveler was indeed a new purchase overseas, they said.

Each traveler gets a personal exemption that allows them to bring back $800 worth of items duty-free, according to a U.S. Customs and Border Protection spokesperson. The exemption is $1,600 from the U.S. Virgin Islands, American Samoa and Guam.

Families traveling together can combine these exemptions, the CBP spokesperson said. Duties on watches and other items are calculated based on the Harmonized Tariff Schedule, considering components like the movement, case and strap, they said.

Travel agents and customs experts say there are still merits to buying European luxury goods overseas, even if they are slapped with tariffs upon reentry to the U.S.

Largely, that’s because of refunds that American travelers can get on the area’s value-added tax.

The upshot for travelers: That VAT refund can be hefty, often more than 15%.

Getting a VAT refund yields a double benefit, Sharad said: Americans get a discount courtesy of that refund, and also reduce any customs-related tax bills (because the tax would be owed on a lower declared value).

Additionally, the base rate for merchandise is often cheaper overseas, Ezon said.

Travelers should be aware that there are certain steps to take to claim a VAT refund, experts said.

For example, the retailer will need to provide a refund form at the point of sale to travelers, who generally need to have their passports handy. Travelers will then need to process the refund; these designated processing services are generally available at airports upon departure, experts said.

From a financial standpoint, potential savings — whether on the VAT or tariffs — would need to outweigh the overall cost of a trip to justify it.

But travel advisors are also planning experiences around the shopping.

Jackowitz, for example, is putting together a shopping-focused trip to Paris for a client and bundling a visit to La Galerie Dior into the itinerary.

For the New York couple traveling to Geneva, getting an appointment at Patek Philippe to try on different watches — along with the ski vacation — was part of the allure.

“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,” said Jamie.

“I imagine it’ll be a lot of fun.”