American boat buyers and European shipyards are facing uncertainty due to proposed U.S. tariffs on European-made goods, including recreational boats and yachts. The European Boating Industry expressed concern over the impact of the 15% tariff, as the U.S. is a crucial market for European boat businesses.

Despite the fact that affluent buyers can likely absorb the 15% tax increase on luxury yachts, brokers anticipate a shift in the cost equation for many purchasers. Kevin Merrigan of Northrop & Johnson emphasized that wealthy individuals are mindful of additional expenses and may reconsider their buying decisions in light of the tariffs.

Buyers of boats and yachts are seeking ways to navigate the new tariffs, with many considering foreign flagging as a strategy to avoid the levies. By registering their vessels in countries like the Cayman Islands or Malta, owners can enter the U.S. as visiting vessels and circumvent the 15% tariff, potentially saving significant amounts on multimillion-dollar yachts.

The new tariff regime may lead to increased demand for U.S. yacht manufacturers like Westport, Trinity, and Burger Boat Company. Brokers are hopeful that the tariffs will bolster sales and prices for preowned yachts already registered in the U.S., as demand for these vessels is expected to rise amidst the uncertainty surrounding European-made boats.

Read more at CNBC: How wealthy yacht buyers plan to avoid the European tariffs