New US Tariffs Hit Gems Trade as Diamond Exemptions Spark Debate

Gems News: The United States has unveiled a new tariff framework affecting the global gemstone and jewelry industry, introducing fresh import duties on products from dozens of trading partners while granting selective exemptions to certain diamond and gemstone categories. The move follows the completion of an investigation by the Office of the United States Trade Representative (USTR) into forced-labor practices across international supply chains, creating a significant shift in the competitive landscape for exporters around the world.

The measures, introduced under the banner “Combating Forced Labor in Global Supply Chains,” impose tariffs of either 10% or 12.5% on products from 60 countries, depending on each nation’s compliance with forced-labor standards.

This Gems News report highlights that while the policy aims to strengthen ethical sourcing and improve labor practices, it also reshapes global trade dynamics by offering exemptions to selected products and countries while leaving others facing additional financial burdens.

Selective Exemptions Reshape Global Competition

According to the USTR, several gemstone-related products have been excluded from the new tariff regime. Loose colored precious and semiprecious gemstones, natural pearls, and natural diamonds imported from the European Union, Cambodia, Indonesia, and Taiwan will remain exempt from the latest duties.

The exemptions were outlined in the annex to a comprehensive 431-page Federal Register notice, which also identifies products the United States cannot manufacture in sufficient quantities domestically. These exclusions are intended to ensure supply stability while supporting industries that depend on imported raw materials.

However, the exemptions are far from universal. Gemstones and jewelry originating from Hong Kong and mainland China will face an additional 12.5% tariff on top of existing Section 301 duties. Meanwhile, products imported from Australia, Colombia, and Thailand will also be subject to a 12.5% tariff, placing exporters from those countries at a notable disadvantage.

India Faces Mixed Fortunes

India, one of the world’s largest gemstone cutting and jewelry manufacturing centers, remains subject to a 10% tariff under the new Section 301 measures. Although this places Indian exports in a lower tariff category than competitors such as Hong Kong, China, and Thailand, the country still loses ground against the European Union, whose natural diamond shipments continue to enjoy duty-free access.

The Gem and Jewellery Export Promotion Council (GJEPC) noted that the disparity particularly benefits Antwerp, Belgium, widely recognized as the world’s leading diamond trading hub. The organization argues that maintaining tariff-free access for European natural diamonds creates an uneven playing field for Indian exporters.

GJEPC Chairman Kirit Bhansali described the 10% tariff as unjustified, emphasizing that it remains a significant challenge for India’s gem and jewelry exports. He added that while India’s position in the lower tariff bracket provides some advantage in finished jewelry exports, obtaining a bilateral trade agreement and securing tariff exemptions for natural diamonds and colored gemstones remain top priorities for the industry.

Industry Groups Continue Lobbying Efforts

The American Gem Trade Association (AGTA) has also been actively involved in discussions surrounding the new tariff measures. Earlier this year, the association joined members of the U.S. Congress in urging the administration to exclude loose precious and semiprecious colored gemstones from all tariffs.

Despite the latest exemptions, AGTA has indicated it will continue advocating for duty-free imports from major sourcing countries including India, Thailand, Sri Lanka, and Colombia. The association believes such measures would help preserve stable supply chains while supporting American businesses that rely heavily on imported gemstones.

The newly announced tariff structure underscores the increasingly complex balance between promoting ethical sourcing, protecting domestic interests, and maintaining fair international trade. While some exporting nations have secured valuable exemptions, others now face additional costs that could influence pricing, sourcing strategies, and competitiveness throughout the global gemstone and jewelry market. Industry leaders are expected to continue engaging with policymakers in hopes of achieving broader exemptions and more balanced trade conditions as discussions evolve.

For the latest on effects of the new U.S Tariffs on the gems and jewelry industries globally, keep on logging to Gems News.