Editor’s Note: This story originally appeared in On Balance, the ARTnews newsletter about the art market and beyond. Sign up here to receive it every Wednesday.
This has already been a tough year for the art industry: there have been sales slowdowns and fragmentation, devastating fires in Los Angeles, and continued wars in Gaza and Ukraine. And that’s not to mention a new US President who has thrown a wrench into just about everything.
Add to all this the proposed tariffs and counter-tariffs between the US and several countries, and more complications are likely to result—especially as the art fair calendar really gets moving, with Frieze Los Angeles set to take place next week and Art Basel Hong Kong scheduled for March. It is clear, at least, that fairs are paying attention. When ARTnews asked Art Basel Hong Kong about the tariffs, a spokesperson said in a statement, “Our team is closely monitoring evolving trade conditions and any potential impact on our exhibitors. We are consulting with trade experts, staying closely connected with our galleries, and remain committed to delivering the best possible experience for our exhibitors and visitors.”
Experts offered ARTnews a bleak picture of the year to come, saying that the tariffs will increase confusion and operating expenses, shift buying behavior among collectors, as well as hurt small and mid-size galleries the most due to limited resources.
“If you’re spending 10 million on a work of art and you’re paying $1 million or $2 million, or even $2.5 million in tariffs because it was imported, you’d say, ‘No way. Forget it. It’s a write-off of $2.5 million. I can’t do that. I’ll go for real estate, or I’ll go for stocks and shares,’” Philip Hoffman, founder and CEO of the Fine Art Group, told ARTnews. “It’ll be the kiss of death.”
Tracking these tariffs is itself a challenge because they are often delayed just as quickly as they are announced. That was exactly what happened when, on February 3, President Donald Trump and the leaders of Canada and Mexico agreed to delay tariffs and counter-tariffs of 25 percent for 30 days. The announcement came not long before the start of Mexico City Art Week.
Where, exactly, the tariffs apply is itself confusing. Canada’s list of items that would have been subject to counter-tariffs included original hand-drawn paintings, drawings, and pastels. A new tariff of 10 percent on goods from China did go into effect at midnight on February 3, for a total tariff rate of 17.5 percent. But a notice from the US Customs and Border Protection agency on February 5 said that objects such as “publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds” were exempt.
The exemption for artworks is subject to interpretation by US Customs and Border Protection officers. The possibility of incurring a total tariff rate of 17.5 percent—due to misinterpretation or additional changes in US trade policy—could be enough to deter many US-based collectors from even considering acquiring artworks made in China and Hong Kong.
“The extra 10 percent is not for the time being, as of today, applied to artworks,” said Claudia Albertini, director of Massimo De Carlo’s Hong Kong location and co-director of the Hong Kong Gallery Association. But, she warned, “It may be. So we need to be aware of that, because things change continuously.”
Hoffman, the Fine Art Group founder, said some methods to bypass tariffs were used after Brexit, which he described as a “nightmare.” Those methods included shipping works to other regions or countries first, storing originals in warehouses or freeports, and displaying high-quality reproductions.
“At the top end, there will be structures created to move art from one place to the next, but most people won’t be able to afford that or have the ability to do that,” Hoffman told ARTnews. “And then it’ll just give another knock to the international art market.”
And even with this tariff exemption for artworks, many art supplies, business supplies, electronics, lumber (art crates and stretcher bars), event supplies, and inexpensive art-related merchandise (tote bags, sweatshirts, T-shirts, socks, umbrellas, and toys) manufactured in China will now be subject to this 17.5 percent tariff if they are imported to the US.
“Everything that’s affordable is going to become unaffordable,” Denise Nicole Green, associate professor of fashion design and management at Cornell University, told ARTnews in reference to Uniqlo’s popular lines of art-related clothing. “The things that were inexpensively manufactured abroad are going to be more expensive, especially for these accessible brands.”
Art shipping rates are also expected to go up due to the additional paperwork required and new operating expenses. “It wouldn’t surprise me if you’re starting to see disruptions right now as importers try to get ahead of tariffs and import as much as they possibly can,” Wendy Edelberg, a Brookings Institute senior fellow and an economist, said. “That, in of itself, is going to raise prices.”
On February 10, Trump also implemented a 25 percent tariff on all steel and aluminum imports into the US. The US gets most of its steel from Canada, Mexico, and Brazil. Steel is used in many large-scale installations by contemporary artists such as Jeff Koons, Anish Kapoor, Yayoi Kusama, and Antony Gormley. Both materials are also integral to the construction industry and feature in the exteriors of major art museums.
The issue of tariffs will likely only get worse for art professionals across the industry for the rest of this year. Trump has also threatened tariffs against the European Union, Taiwan, and other countries. Edelberg said small businesses like galleries will have a harder time dealing with tariffs—including thinking about supply chains, renegotiating contracts, and lobbying the government. These galleries are already at a disadvantage based on their size, and they will be at a further loss here because they have less bargaining power than blue-chip galleries with multiple locations worldwide.
“They’re going to have less bargaining power with their customers, and so they’re going to be able to do less of a good job of passing along higher prices, which just means if they want customers to still buy their products, they may well have to really eat the tariff on their own. That’s going to make it a lot less profitable to be in business,” Edelberg said. “Costs are going to be higher across the board.”
Other art professionals are not as pessimistic. Wendy Xu, general manager for White Cube’s Asia operations, said, “At present, we are not foreseeing a major impact, but we continue to closely monitor the situation.”
