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The art market, like the rest of the world, is trying to assess the impact of President Trump’s recent tariffs on their business. As of this writing, US tariffs do not currently include artworks but retaliatory tariffs on art have been imposed by some countries (including England and Canada) and other imports the industry relies on have been affected.

Until the dust settles, it is hard to determine how the changes will shape the market but the players are wary. Art fairs, which thrive on international participation and the movement of artworks across borders, worry about a decrease in exhibitor participation if costs become too prohibitive. Collectors may stop purchasing in foreign countries to avoid the additional expense and complications of importing works purchased abroad. Major auction houses, which have made great strides to bring bidders from around the world to their major marquee auctions, may find buyers retreat to more regional sales. Gallerists with international rosters of artists and clientele are trying to assess how to adjust prices and rethinking their upcoming shows. Biennials and museum will face challenges as customs regulations will certainly complicate the logistics and cost of art transport. And at the place where it all begins, artists who use materials and fabricators worldwide are trying to assess how the changes will affect their production.

The US is the largest art market in the world, so there may be some advantages for regional fairs and auction houses. However, businesses are likely to pass on their increased costs to consumers, raising prices and making collecting art an extravagance that will eventually lead to an increasingly shrinking market for all.

Art world cities have long competed based on their cultural offerings of galleries, fairs, biennials, auctions, as well as their hotels and restaurants. In Europe, this has led to collectors rotating between cities like Maastricht, Basel, Paris, Berlin and Venice. Now, the EU's Directive 2022/542, enacted January 2025, adds tax considerations to this dynamic by shining a light on VAT rates on fine art across member states.

Previously, VAT rates ranged from 5% to 21%, challenging cross-border art commerce. Germany and France have adopted competitive rates of 7% and 5.5% respectively, while Belgium and the Netherlands consider higher rates of 21% and 22%. These tax disparities may increasingly influence collector behavior, potentially altering the competitive balance among European art destinations.

The art market is undergoing a significant transformation. While it's true that auction sales dropped by 26% in the first half of 2024, this decline reflects a shift in buying trends that could ultimately benefit the market.

Most of this year's decrease in spending has occurred at the high end, particularly for works priced over $1 million. In contrast, the recently released UBS/Art Basel Survey of Global Collecting reveals that transactions for works under $50,000 have actually increased this year. This trend suggests that the market may be expanding beyond just the ultra-wealthy, which is a positive development for many in the art industry.

Additionally, we’re observing a change in how people buy art. More collectors are visiting galleries and art fairs, taking the time to engage with dealers and view works in person. Presales at fairs and exhibitions are becoming less common, as collectors and advisors shift away from impulse buying. Instead, they are conducting thorough research to find the right piece at the right price.

While this approach may extend the time it takes to close a sale, the increased engagement and activity from collectors is a promising sign for the future of the market.

Art Biennials are a bellwether of contemporary art practices. Organized by host cities, these large-scale exhibitions select a different curatorial team for each iteration. This group is responsible for selecting a theme or trend that they see happening in the world around them and pulling together artists from all reaches of the globe who are exploring those ideas. They are known for introducing the important talents of the future and, as non-selling exhibitions, they provide an important counterpoint to art fairs, which have a clear commercial interest. This year will see a number of important Biennials open around the globe. Among them are:

Sydney Biennale, March 9 – June 10, 2024
Whitney Biennial 2024, New York, March 20- undecided
Venice Biennale 2024, April 20 - November 24, 2024
Dak’art: Contemporary African Biennale, Senegal, May 16 – June 16, 2024
Manifesta 15, Barcelona, September 8 – November 24, 2024
18th Istanbul Biennial, September 14 – November 17, 2024
17th Lyon Biennale, September 21, 2024 – January 5, 2025
Prospect.6: New Orleans, November 2024-Spring 2025

The most transparent reflection of the art market comes through auction house figures. ArtTactic recently released their 2023 findings, and as expected, global auction sales of Contemporary art at the three major houses — Sotheby’s, Christies, and Phillips — were down 17%.

But a closer look shows that the change came primarily in at the high-end sector (lots at $10 million and above), which experienced a 30% decline. The middle market remained strong while the lower market, or works valued under $50,000 made the greatest advancement, with an 18% increase in lots sold and a 7.4% increase in lot values. The middle market is where auction houses make their bread and butter, so watch for in increased focus (and opportunity) in this area in 2024.

Consolidation in the art fair market continues as Frieze recently announced it has acquired The Armory Show and Expo Chicago. This adds to their existing portfolio of Frieze London and Frieze Masters (which run concurrently), Frieze LA, Frieze New York, and Frieze Seoul. The goal, it seems, is to go head to head with Art Basel, which in addition to the original fair in Switzerland, runs similar events in Miami, Hong Kong and Paris.

As these two square off, deep questions are forming as to whether the ecosystem that supports the fairs can keep pace. One colleague recently told me that her gallery participates in fourteen art fairs a year, more than one a month. For each, their costs include a rental fee for the booth, shipping and installation of the artwork, transportation and accommodation for staff as well as entertaining clients. Similar pressure is applied to their stable of artists, who are continually asked to pump out work to fill the booths. Collectors eventually bear the brunt of the expenses with their purchases, but as people return to pre-Covid spending and activities, the number of regulars on the circuit is thinning.

Only time will tell whether the galleries, artists and collectors can keep pace with the international calendar of events set by these two giants, not to mention the proliferation of regional fairs that also exist, or whether art fair fatigue will set in.

The May auctions are a bellwether heavily watched by those trying to gauge the art market. Over the course of two weeks, the three major houses - Christie's, Sotheby's and Phillips - host a series of single owner and departmental sales of Impressionist, Modern, Contemporary and Emerging art. This year, almost 2 billion dollars of artwork changed hands, a strong number but still down from the jaw-dropping 2.5 billion the fall before. Almost every sale came in at the low range of the auction house's estimates, indicating more conservative buyers and a thinning of bidders willing to drive up prices. While there were some significant new records set by artists of color and female artists, the decline in results over past year indicates that the art market is finally succumbing to the uncertain climate that has affected the general economy.

Each year, a number of organizations compile statistics on the art market. The Deloitte Art and Finance Report, The ArtTactic Global Art Market Outlook, and ArtPrice's The Art Market are wonderful resources but the one I find the most interesting is The Art Basel and UBS Art Market Report, compiled by Dr. Clare McAndrew. Released two weeks ago, it had some insightful findings into the continued shifts in the post-covid market:

• Global sales were up 3% over the previous year, surpassing the pre-pandemic levels of 2019.
• Auction sales, which flourished during the early years of COVID, were down in 2022 but dealer sales were up as buyers returned to galleries and art fairs.
• A closer look shows dealers with turnovers over $10 million saw the largest increase while smaller and mid-sized galleries have been hard hit by rising expenses and cost-conscious buyers.
• The zero-COVID policy in China slowed their market but England rebounded into second place behind the US for global market share.
• E-commerce was down for both auction houses and galleries as buyers returned to in-person shopping.
• Sales of Art-Related NFT's declined 49% from the previous year's high, as the price of Etherium slumped and speculators exited the market.

2023 is the 50^th anniversary of Pablo Picasso's death and close to fifty museums around the globe have mounted exhibitions as part of Celebration Picasso 1973-2023. 

Among the highlights are:

Picasso Landscapes: Out of Bounds, Mint Museum, Charlotte (February 11 – May 21)
Picasso – The artist and his model, Fondation Beyeler, Basel (February 18 – May 1)
Forms and metamorphoses: the ceramic creation of Picasso, Magnelli Museum, Vallauris, France (May 6 – October 30)
Young Picasso in Paris, Solomon R. Guggenheim Museum, New York (May 12 – August 7)
Picasso and Feminism, Brooklyn Museum, New York (June 2 – September 24)
Picasso – El Greco, Museo Nacional del Prado, Madrid (June 21 – October 1)
Picasso in Fontainbleau, Museum of Modern Art, New York (October 1 – February 2)
Picasso. Draw to Infinity, Center Pompidou, Paris (October 18 – January 1)
Picasso 1906: The Turning Point, Museo Nacional Centro de Arte Reina Sophia, Madrid (November 14 – March 4)

Los Angeles has always had a vibrant art scene, but it has traditionally been known for its strong museums, art schools and affordable studios rather than its commercial presence. That perception, however, is changing. In 2019, London-based Frieze launched an annual art fair on the lot of Paramount Pictures, which was accompanied by the more edgy Felix Art Fair. The Fairs’ continued commercial success has convinced a coterie of international and New York-based power galleries to reconsider the viability of Tinseltown. This year alone, Pace, David Zwirner, Sean Kelly, Marian Goodman, Lisson, Albertz Benda, Karma and Danzinger have or will open up new LA-based posts. Numerous theories have been proffered for this shift, including LA’s growing art collector base, proximity to collectors from East Asia, the expanding museum scene and, perhaps most of all, the fallout from the Wayfair Sales Tax Case. This verdict, which requires galleries who sell over a certain threshold to collect sales tax even if the work is being shipped out of state, has made traveling to New York to purchase art less appealing, paving the way for a new nexus on the west coast.