How Geopolitics and Policy Are Shaping the 2025 Art Market

Confidence is the foundation of any art market, especially for blue-chip works and high-value investment pieces, but in times of economic turbulence and political instability, it is hard to gauge the current level of confidence. Volatility, driven by shifting taxation policies, lingering Brexit aftershocks, and geopolitical conflicts, has left collectors taking a more cautious approach to acquisitions. This caution is reflected in the numbers, with March 2025 marking the third consecutive year of declining London totals for major sales. Hammer values across major auction houses have fallen by a combined 32%, signalling a continued retreat in high-value transactions. While blue-chip names still attract attention, their values have softened, and the affordable prints segment has seen increased activity.

Trade Policies

Since returning to office in early 2025, Donald Trump has implemented a series of sweeping policy changes aimed at addressing trade imbalances and bolstering U.S. manufacturing. These policies are reshaping the art market, and his administration’s renewed focus on tariffs has introduced economic uncertainty, particularly for galleries and collectors reliant on international trade. Since March 2025, Trump has issued reciprocal tariffs targeting imports from key trading partners, including Canada, Mexico, China, and the European Union. Currently, the existing tariffs include 25% additional tariff on imports from Canada and Mexico, 10% additional tariff on imports from China, 25% tariff on steel and aluminium, and a 25% tariff on vehicles and parts. As of April 2, 2025, Trump announced a new series of tariffs, including a universal 10% tariff on imports from most countries, effective April 5, 2025, and higher, country-specific tariffs for certain nations, effective April 9, 2025.

Update: 09/04/2025

On 9 April 2025, the U.S. imposed a sweeping set of new tariffs targeting imports from 60 countries labelled the "worst offenders" by Trump. These include a 104% duty on Chinese goods, following Beijing’s refusal to lift its own retaliatory tariffs against the U.S. Other nations hit include Japan, facing a 24% tariff, and Cambodia at 49%, a sharp increase from the standard 10% baseline tariff introduced on 5 April. Despite the pressure, China - whose exports to the U.S. amount to 2% of its overall economy - refuses to back down.

While it remains uncertain how these policies will directly impact art imports, there are indications that certain categories of artworks and prints may be exempt from the tariffs under 50 U.S.C. § 1702(b), specifically those under Chapters 97 and 49 of the Harmonized Tariff Schedule (HTS). However, these exemptions have not been officially confirmed and could be subject to change, so caution is still advised. In the meantime, the broader economic repercussions are already being felt: the 25% tariff on Canadian imports, for example, could significantly hinder cross-border sales and discourage Canadian galleries from exhibiting in the U.S., further isolating the American art market.

Update: 07/04/2025

So far, art continues to be largely unaffected by Trump’s tariffs, as the U.S. has not included artworks on its list of taxed imports. However, other countries have targeted art in retaliation. The UK has proposed tariffs on various goods - including paintings, drawings, prints, and contemporary pieces under 100 years old - if a better trade deal isn't reached within four weeks. Canada has already imposed a 25 percent tariff on U.S. art goods, including decorative works.

Arts and Culture

Beyond trade policies, the Trump administration has also taken a hardline stance on arts and culture, particularly in relation to diversity, equity, and inclusion (DEI) initiatives. In March 2025, an executive order mandated the termination of DEI programmes within federal agencies, including those providing arts funding. The National Endowment for the Arts (NEA) now faces restrictions preventing it from awarding grants to projects that promote “gender ideology”, a move that has resulted in legal challenges and protests from arts organisations. Additionally, the elimination of the Challenge America programme, which provided grants to arts organisations in underserved communities, has only exacerbated concerns surrounding shrinking federal support for the arts.

Institutional policies are also shifting under Trump’s leadership. A new executive order has targeted the Smithsonian Institution, instructing federal museums to prioritise exhibitions that promote a more nationalist narrative. This directive has raised alarms within the arts community, with artists such as Roberto Lugo voicing concerns over the censorship of artworks, as this has potential to limit artistic freedom and reshape how American history and culture are presented. The order follows reports of censorship, including the removal of the words “transgender” and “queer” from a National Park Service webpage about the Stonewall National Monument. Such moves reflect a broader ideological shift in cultural policy, creating concerns that the administration is using federal influence to reshape the narrative of American heritage.

The combined factors of trade restrictions, funding cuts, and ideological shifts are creating widespread uncertainty in the U.S. art market. With collectors wary of economic volatility and international consignments facing hurdles, the landscape is becoming increasingly difficult to navigate.

Policies

The UK’s political shift under the 2024 Labour Party victory marked the end of fourteen years of Conservative governance. Under Keir Starmer, Labour has outlined policy changes that could have far-reaching consequences for the art world, particularly in the areas of taxation, arts funding, and Brexit-related trade issues.

Labour has expressed a strong commitment to supporting the arts, recognising the creative industries’ £125 billion annual contribution to the UK economy. As part of this commitment, Culture Secretary Lisa Nandy announced in January 2025 a £60 million funding boost aimed at revitalising cultural institutions, supporting creative jobs, and increasing accessibility to the arts. The Party’s Access to the Arts initiative seeks to break down socio-economic barriers by improving arts education, expanding opportunities for young people, and reversing previous funding cuts to art schools and cultural institutions. If successfully implemented, these initiatives could foster a new generation of artists and collectors while ensuring the long-term sustainability of the sector.

However, Labour’s broader fiscal policies, such as its tax reforms targeting high net worth individuals (HNWIs), have raised concerns within the art market. The abolition of the non-domiciled tax status from April 2025, which previously allowed wealthy residents to shield overseas assets from UK taxation, has prompted some major collectors and investors to reconsider their financial strategies. A potential “wealth flight” could have significant consequences for the UK’s art market, as patronage, private collecting, and art investment are closely tied to the presence of ultra-wealthy individuals.

Brexit

Brexit also continues to pose a challenge for the UK art market, with increased logistical costs, import and export VAT, and complex customs procedures making cross-border transactions more difficult, especially for smaller galleries. However, in March 2025 Labour took a notable step to address trade issues by extending the Temporary Admission period for artworks. This allows art and antiques to be imported tax-free for up to four years, a move designed to attract international collectors and dealers by mitigating some of Brexit’s trade restrictions. While this policy signals a positive shift, industry leaders, including the British Art Market Federation, remain hopeful that Labour will take further action to ease the UK's post-Brexit trade barriers.