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Wealthy travel to Europe to dodge tariffs on luxury goods

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12 months ago

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Visitors and salesmen stand at the booth of Swiss luxury watchmaker and jeweler Piaget, during the “Watches and Wonders Geneva” luxury watch fair, on April 1, 2025.

Fabrice Coffrini | Afp | Getty Images

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.

‘Every dollar counts’

A Christian Dior luxury store in Paris on July 22, 2025.

Cyril Marcilhacy/Bloomberg via Getty Images

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.

How the ultra wealthy travel in Madrid

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.

‘There is no way around that’

Celal Gunes/Anadolu via Getty Images)

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.

Person walking past the Patek Philippe boutique on Rue du Rhône on Aug. 2, 2025 in Geneva, Switzerland.

Robert Hradil | Getty Images News | Getty Images

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.

The value of buying overseas

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.

An artisan works in the Montex workshop at the Chanel SA 19M campus in Aubervilliers, France, on Jan. 20, 2022.

Benjamin Girette/Bloomberg via Getty Images

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.”

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Personal Finance

$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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6 days ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Personal Finance

Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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1 week ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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Personal Finance

Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

Published

2 weeks ago

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August 1, 2026

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As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

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