Trade policy now shapes the global art market as much as taste does, and we think most investors are underpricing what that means. Since early 2025, a wave of US tariffs, a new EU import licensing system, and lingering Brexit friction have redrawn the map of where art moves, where it sells, and what it costs to get there. One of the things we have always liked about art is that it behaves like a neutral currency. You can buy a painting in New York, put it on a plane, and sell it in Hong Kong. When governments start taxing that plane ride, the math of every cross-border deal changes, and so does the cost basis, the regional flow of capital, and the risk around classification, compliance, and timing.

The global art market grew 4% in 2025 to an estimated $59.6 billion, according to the Art Basel and UBS Global Art Market Report 2026. The headline number hides the part that matters more to us. The share of global art imports held by the US, China, and the UK fell to its lowest level in 25 years, down 5 percentage points year-on-year. Trade barriers are scattering the market.

Which art does the US tariff actually hit, and which is exempt?

Fine art classified under HTS Headings 9701 through 9705 was largely exempt, but the story of US art tariffs in 2025 turned out to be a story of exemptions, loopholes, and misclassification. So it is worth being precise about who paid and who did not.

When the Trump administration invoked the International Emergency Economic Powers Act (IEEPA) to impose tariffs on major trading partners in early 2025, fine art initially looked safe. IEEPA contains the Berman Amendment, which exempts "informational materials" from trade restrictions. Paintings, sculptures, limited-edition prints, and works classified under HTS Headings 9701 through 9705 fall under that shield. A Basquiat shipped from London to New York did not, in theory, owe a cent in duty.

In practice, the exemption proved narrower than many dealers expected. Antiques over 100 years old (Heading 9706) were excluded from the carve-out. Decorative arts, design objects, and mixed-media works ran into trouble. A welded steel sculpture tagged by customs as "Article of Base Metal" under HS 7326 triggered tariffs as high as 25% to 35%. A painting with heavy textile collage elements got flagged as "Manufactured Textile," pulling it into tariff codes meant for garment factories. Galleries and customs brokers reported inconsistent enforcement, and the burden of correct classification fell on shippers and dealers, many of whom lacked the expertise to navigate the codes.

The bigger blow came from the blanket 20% tariff on imports from the EU and China, which the administration applied to goods classified as "high-value luxury goods." This swept in categories of art and antiques that fell outside the narrow fine-art exemption, raising the landed cost of everything from French Art Deco furniture to Chinese ceramics.

What did the Supreme Court ruling do to art tariffs?

On February 20, 2026, the Supreme Court struck down IEEPA tariffs entirely. In a 6-3 ruling in Learning Resources, Inc. v. Trump, Chief Justice Roberts held that IEEPA's grant of authority to "regulate importation" does not include the power to impose tariffs, calling tariffs "very clearly a branch of the taxing power" reserved for Congress. The same day, the administration pivoted to Section 122 of the Trade Act of 1974, imposing a 10% global "temporary import surcharge" effective February 24, 2026, for 150 days.

For the art market, the practical effect was a reduction from 20% to 10% on most goods, and continued uncertainty. Section 122 caps tariffs at 15% and limits their duration without congressional action. Whether Congress extends, modifies, or lets the surcharge lapse by late July 2026 remains an open question. There is never a crystal ball on the legislative calendar, so we would treat the 10% as a working assumption rather than a settled rate.

Where does art get bought and sold when tariffs rise?

Trade policy has pushed art transactions toward domestic markets and away from cross-border ones, and the clearest place to see it is the data. The Art Basel and UBS report found that more than half of surveyed dealers cited rising taxes, duties, and shipping costs as deterrents to international sales. The market began to split. High-value global art became the province of ultra-wealthy buyers who could absorb the compliance costs of lawyers and logistics brokers, while mid-market dealers focused on selling locally. This is a familiar pattern to us. Friction at the bottom of a market tends to concentrate activity at the top, where buyers can afford to ignore it.

This shift shows up in the numbers. The US remained the largest art market in 2025, accounting for 44% of global sales by value, up one percentage point year-on-year. All ten of the year's highest-priced auction lots sold in New York, led by Gustav Klimt's Portrait of Elisabeth Lederer at $236 million through Sotheby's. Domestic strength masked a retreat from international dealing.

For US-based art investors, the tariff environment has a direct cost implication. Buying a work at auction in London or at Art Basel in Switzerland now carries a 10% surcharge on top of buyer's premium, shipping, and insurance. That added cost compresses potential returns on resale, particularly for works in the six- and low-seven-figure range where margins are already tight. We tend to stay under roughly $10 to 15 million per work for liquidity reasons, and it is exactly that band where an extra 10% on the way in does the most damage to a return.

How do freeports let investors hold art without triggering tariffs?

Freeports, those high-security storage facilities in tax-neutral zones, have seen a surge in activity. In a freeport, art can change hands between a seller in one country and a buyer in another without the work ever technically entering either jurisdiction. No import duty, no VAT, no taxable event until the work leaves the facility.

The Geneva Freeport, the largest such facility at 150,000 square meters with an estimated insurance value of $100 billion, has long been the center of this trade. The tariff disruptions of 2025 boosted demand for freeport space in Singapore, Luxembourg, and Delaware as well. For investors, freeports offer a way to hold and trade art without triggering tariff liabilities, though they come with storage costs, limited access, and growing regulatory scrutiny from governments concerned about opacity. The trade-off is real. A work that lives in a vault is harder to enjoy and, in some respects, harder to market, so the duty savings come at a liquidity cost.

How is the US-China trade war changing where Asian art trades?

The US-China trade war has redrawn Asia's art map, and the short version is that the buyer pool did not disappear, it moved. Punitive tariffs on US cultural goods entering China exceeded 35%, making it effectively impossible to export American art to the mainland. At the same time, the 20% US tariff on Chinese imports caught Chinese ceramics, antiquities, and contemporary art heading the other direction.

Hong Kong, long the gateway between the US art market and Asian buyers, lost ground. Imports into Hong Kong and mainland China fell in 2024, and the decline continued into early 2025. The Art Basel report noted that Hong Kong's buyer base is becoming "more Asian and less simply international-by-default."

The winners have been Singapore and Seoul. Singapore became the fifth-largest global art importer in 2024, with a 74% surge in import values to nearly $1.7 billion. South Korea posted sales gains of 6% in 2025. Artists and dealers who once routed everything through Hong Kong now treat Singapore as the region's broadest commercial meeting point, while Seoul handles high-value contemporary trade.

For investors holding works by Chinese contemporary artists or looking to sell into Asian markets, this geographic shift matters. The buyer pool has not disappeared. It has moved. We think about this the way we think about selling our own holdings. We have the largest collection of Banksy, and if we want to sell one, we will probably sell it in the UK, because there is more demand there and we can get higher prices. The same logic now applies across Asia. Knowing which city hosts the right fair, the right collectors, and the right tax treatment can determine whether a sale nets 10% more or less.

Has Brexit hurt the London art market?

Brexit added friction to London dealing that accumulates with every cross-Channel transaction, and that friction is now showing up in the trade data. It did not destroy the market. It taxed it, slowly.

Before January 2021, a gallery in London could truck a painting to a client in Paris with no customs forms, no duties, and no delays. That ended with the UK's exit from the EU single market. Every shipment to the EU now requires pro-forma invoices, customs entries, and commodity codes. Import VAT is due on goods arriving in the UK from the EU. Museums report that touring exhibitions have become more expensive due to increased insurance and logistics costs.

The practical effects showed up in the data. UK arts exports to the EU fell sharply in the years following Brexit, and the cancellation of the Masterpiece London fair in 2023 signaled that the cost of doing business had become untenable for some dealers. The UK's share of global art trade has been under pressure, and while London remains the third-largest auction center, it competes with a structural disadvantage against New York (domestic market scale) and Paris (EU single market access).

For investors, the takeaway is that buying or selling through London now carries costs and delays that did not exist five years ago. A work purchased at a London auction for resale to a European collector faces import duties on both legs of the trip that would not apply to a work purchased in Paris.

What is the EU's new art import licensing system?

EU Regulation 2019/880, fully enforced since June 28, 2025, now requires import licenses or importer statements for cultural goods entering the EU from non-EU countries. The regulation was adopted in 2019 but delayed until its electronic licensing system was ready, and its arrival adds a real layer of compliance to art imports into the bloc.

The rules hit hardest for certain categories. Archaeological objects and parts of monuments over 250 years old now require import licenses obtained before the goods cross the border. For other cultural goods created or found outside the EU, importers must submit formal statements through the new electronic ICG system, with categories covering Chinese art, Japanese art, Indian art, Islamic art, fossils, tribal art, Russian icons, and pre-Columbian art, among others.

One change matters more than the paperwork. The regulation removed the phrase "to the best of my belief" from the importer statement. Importers now assume full legal responsibility for the accuracy of their declarations. This shifts the compliance burden and the legal risk squarely onto buyers and dealers.

For art investors, the regulation means that buying non-European art through EU auction houses or dealers now involves more paperwork, longer lead times, and higher compliance costs. It also raises the premium on provenance, the chain of ownership and legal export history of a work. Works with clean, well-documented provenance will move through the system faster and at lower cost than works with gaps in their history. We have always treated provenance as part of what we are underwriting. This regulation puts a price on it.

What does trade policy mean for art investors?

Trade policy has become a variable in art investment returns at a scale that did not exist a decade ago, and the effects are concrete. They show up as added costs on purchase, delays on delivery, legal risk on classification, and geographic constraints on where and to whom you can sell. These are not abstract numbers.

Three shifts deserve attention from anyone allocating capital to art.

The cost of cross-border art deals has risen. Between US tariffs (currently 10% under Section 122), EU import licensing requirements, and post-Brexit customs duties, the all-in cost of buying art internationally and bringing it home can add 15% to 25% to the hammer price, depending on the work's classification, origin, and destination.

Geography now matters more for resale. A work stored in a Geneva freeport has a different liquidity profile than one hanging in a New York apartment. The tariff and regulatory environment of the buyer's jurisdiction affects what they are willing to pay.

Compliance is a cost center. Proper customs classification, provenance documentation, and regulatory filings require expertise that costs money. For large transactions, these costs are manageable. For mid-market works, they can eat into returns in ways that make domestic purchases more attractive on a net basis.

The Bottom Line

  • US tariffs on art have shifted from 20% under IEEPA to 10% under Section 122, but the rate remains uncertain past July 2026 and the exemption for fine art classified under HTS 9701-9705 still depends on correct customs paperwork.
  • The global art market grew 4% to $59.6 billion in 2025, but the share held by the US, China, and the UK fell to a 25-year low as trade barriers pushed activity toward domestic markets and tax-neutral freeports.
  • EU Regulation 2019/880, fully enforced since June 2025, requires import licenses or electronic declarations for non-European cultural goods entering the EU, with importers now bearing full legal responsibility for accuracy.
  • Asia's art trade is redistributing from Hong Kong toward Singapore and Seoul, driven partly by US-China tariff friction that makes cross-Pacific dealing with the mainland cost-prohibitive.
  • For art investors, trade policy now functions as a variable cost that affects purchase price, resale geography, and liquidity, making provenance documentation and customs classification more important than ever.

Sources

  1. Art Basel and UBS. "The Art Basel and UBS Global Art Market Report 2026." Art Basel, March 2026. https://www.artbasel.com/stories/the-art-basel-and-ubs-global-art-market-report-2026
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  4. Holland & Knight. "Supreme Court Strikes Down IEEPA Tariffs: What Importers Need to Know Now." Holland & Knight, February 2026. https://www.hklaw.com/en/insights/publications/2026/02/supreme-court-strikes-down-ieepa-tariffs
  5. The Art Newspaper. "'Complete shock': Trump tariffs upend decorative arts trade in US." The Art Newspaper, November 2025. https://www.theartnewspaper.com/2025/11/04/complete-shock-trump-tariffs-upend-decorative-arts-trade-united-states
  6. European Commission. "Protecting Cultural Heritage: EU Regulation to combat illicit trade comes into effect." Taxation and Customs Union, June 2025. https://taxation-customs.ec.europa.eu/news/protecting-cultural-heritage-eu-regulation-combat-illicit-trade-comes-effect-2025-06-30_en
  7. Fieldfisher. "Art Collectors Beware: Changes to Importing Cultural Property in the EU in 2025." Fieldfisher, 2025. https://www.fieldfisher.com/en/insights/art-collectors-beware-changes-to-importing-cultural-property-in-the-eu-in-2025
  8. Cultural Property News. "The New Costs of Collecting: How 2025 Tariffs Are Reshaping the Art and Antiques Trade." Cultural Property News, 2025. https://culturalpropertynews.org/the-new-costs-of-collecting-how-2025-tariffs-are-reshaping-the-art-and-antiques-trade/
  9. Art Basel. "A new map of the Asian art market is emerging." Art Basel, 2026. https://www.artbasel.com/stories/art-market-trends-japan-singapore-hong-kong-asia
  10. Artnet News. "Where Is the Asian Art World Headed in 2026? 4 Insights." Artnet News, 2026. https://news.artnet.com/market/the-asia-pivot-recap-2025-2726775
  11. UNION Fine Art Services. "U.S. Tariff Exemptions For Informational Materials." UNION, 2025. https://unionfas.com/tariff-exemptions-for-informational-materials/
  12. Supreme Court of the United States. "Learning Resources, Inc. v. Trump." 24-1287, February 20, 2026. https://www.supremecourt.gov/opinions/25pdf/24-1287_4gcj.pdf