Trump’s tariffs may be pushing American consumers to spend their money abroad, rather than buy foreign products at home and pay the extra premium, according to CNBC reporting.
Affluent Americans who are looking to purchase luxury goods such as Swiss watches or French couture are increasingly deciding to tag the cost of the treat onto a trip to Europe, CNBC says.
Travelling, of course, adds expense to the price of the desired item, but it avoids the 15% US tariff that came into play on most European goods in August. That levy increases to 39% on Swiss products. On top-end watches such as those made by Patek Philippe or Audemars Piguet, whose prices can rise into the hundreds of thousands of dollars, the premium tariffs put on an imported piece can amount to tens of thousands, making it well worthwhile to combine the purchase with a holiday.
~20% of america’s imports come from the european union
— ian bremmer (@ianbremmer) July 29, 2025
70% of those will be hit with trump’s 15% tariffs
totaling around €780bn worth of trade pic.twitter.com/Ahmf41typA
The trend echoes the phenomenon that saw US Taylor Swift fans paying to see her on a foreign leg of her worldwide tour, finding it was cheaper to pay for flights and a hotel and a ticket in a non-US city than it was to see the superstar in her home country.
In some cases, luxury European goods are not even available for import any more. A “very important” independent watchmaker told Robb Report in May 2025 that it would not be selling its watches in the United States due to the tariffs, predicting that its customers would travel.
But whether it’s due to availability issues or a desire to save money, US consumers thinking of going abroad to buy should be aware that they are expected to declare foreign purchases to US customs officials when bringing items into the country. It is unclear whether all the consumers interviewed by CNBC were planning to do so.
Luxury giants Chanel, Louis Vuitton and Dior may have dodged the worst in the US-EU trade deal, but a new 15% tariff on European goods threatens to deepen the pressure on an industry already faced with slumping consumer demand and fading pricing power https://t.co/GiPfOaYe8u pic.twitter.com/Q32Y9Z0DF2
— Reuters Business (@ReutersBiz) July 29, 2025
Travellers benefit from an €800 VAT allowance, but purchases made abroad over that amount should in fact be hit by tariffs. However, it is possible to claim a VAT refund of up to 15% VAT on items bought overseas. To claim it, shoppers need to be able to provide a refund form given to them at the point of sale and go through processing before departure, usually at an airport.
The reporting comes amid rising inflation expectations in the US and building concerns about the impact of tariffs on prices, especially for food and groceries. The University of Michigan’s final August Consumer Sentiment data showed a decline of 5.7% month-on-month, with confidence dropping across income and age groups.
