Tariffs Hit Hard: What Jewelry Professionals Need to Know

On April 2, former U.S. President Donald Trump announced sweeping new import tariffs, which he claims will "make America wealthy again." While intended to boost domestic economic power, the global ripple effects are already beginning, particularly in sectors like jewelry and watches, which rely heavily on international trade.

In a dramatic speech at the White House—his Administration Labeled It 'Liberation Day' —Trump declared that the U.S. had been "looted" for decades. Now, under his plan, the UK faces a 10% tariff, the EU 20%, India 27%, Switzerland 31%, Taiwan 32%, China 34%, and Cambodia a striking 49%.

India in the Spotlight: Diamond and Jewelry Exports Under Pressure

India, the world's largest source of polished diamonds, faces a hefty blow. The new 27% tariff on Indian goods includes sharp increases on cut and polished diamonds, which previously had no import duty. Tariffs on gold and platinum jewelry will jump to between 32% and 34%, while silver jewelry could face up to 40.5%. Even pearls, lab-grown diamonds, and imitation jewelry are affected, with rates climbing as high as 38%. These numbers come on top of existing duties, multiplying the pressure.

Kirit Bhansali, chairman of India's Gem & Jewellery Export Promotion Council (GJEPC), called it a "panicky situation for exporters," adding confusion on how the new tariffs will be applied. The council is in close contact with Prime Minister Narendra Modi's office and is coordinating meetings with stakeholders and customs officials to ensure clarity and facilitate smoother clearances.

Jewelry and watch brands that import into the U.S. and their retail partners are now facing tough questions about the viability of the American market. Some are already feeling the pressure. Watches of Switzerland saw its stock fall 12% within two hours of the announcement, its lowest point in seven months.

Pandora, which sources from countries such as Thailand, Vietnam, India, and China, has estimated the impact on its business at around £135 million ($155 million) annually. The company is now exploring strategies like price increases and supply chain restructuring.

Meanwhile, De Beers has stated that it assesses the situation and will consult with partners to determine the best course forward. The Gemological Institute of America (GIA) also reviews the necessary changes to ensure service continuity.

India exports roughly a third of its $33 billion jewelry and gem output to the U.S., making the stakes especially high. The concern is not just about costs; it's about the long-term stability of supply chains and pricing models. Tariffs this high may lead to fragmented pricing strategies, decreased U.S. demand, and a reshuffling of market priorities.

That said if the American economy does see gains, U.S.-based jewelers or those with solid infrastructure in the country could benefit. Others must reconsider their international strategy, renegotiate agreements, or explore alternative markets.

Uncertainty for Italian Jewelry Exporters: A Cause for Concern

Italy, one of the world's leading exporters of fine jewelry, also feels the weight of uncertainty. According to Flavio Cereda, Investment Manager Luxury Brands at GAM, the U.S. is the second-largest luxury goods consumer in the world, responsible for about 23–24% of global demand. These tariffs, even if partly absorbed at the import level, will inevitably affect margins and possibly retail prices.

Cereda notes that while high-end brands like Hermès and Ferrari may weather the storm with minimal impact, others are more exposed due to their pricing tiers and high dependency on the U.S. market. The luxury watch segment will be hit hard, though iconic brands such as Rolex and Patek Philippe are expected to maintain resilience.

The Arezzo district, a major Italian export hub for goldsmithing, is also worried. Giordana Giordini, president of the goldsmithing section of Confindustria Toscana Sud, emphasized that the district is heavily export-dependent. Its jewelry exports last year were over 7.7 billion euros, up from 3.5 billion the year before. Any trade instability with the U.S. could have a significant impact.

Italian jewelry makers have long found strong demand in the U.S. market. While some growth last year was driven by other global factors (such as Turkish fiscal changes), American consumers remain crucial. Local industry leaders are urging caution and unified efforts to support domestic markets while continuing to push for clarity and stability in trade relations.

Impacts Closer to Home: What This Means for the UK and Europe

Though the UK was hit with the lowest tariff (10%), the consequences could still be significant. With over £60 billion in goods exported to the U.S. each year, analysts are warning of a slowdown in growth and possible government responses, ranging from spending cuts to tax increases.

Labor leader Kier Starmer acknowledged the economic impact but emphasized the need to remain calm and prepared: "One of the great strengths of this nation is our ability to keep a cool head."

So far, the UK has held off on retaliatory tariffs, unlike the EU, which is already preparing countermeasures. According to the Office for Budget Responsibility, a tit-for-tat response could shave up to 1% off the UK's GDP next year.

The Antwerp World Diamond Centre (AWDC) has responded by launching a dedicated section on its website to guide stakeholders through the shifting trade landscape.

As talks between India and the U.S. continue, trade associations like the GJEPC are pressing for a bilateral trade agreement to reduce the damage. "This agreement will be critical in addressing the mitigation of U.S. concerns and securing the long-term interests of the gems and jewelry sector," said Sabyasachi Ray, executive director of GJEPC.

Navigating What Comes Next

What remains to be seen is whether Trump's plan will truly revive the U.S. economy or send shockwaves through an already fragile global system. For now, jewelers and retailers worldwide will need to stay agile, informed, and ready to adapt.

Let's continue watching closely, sharing knowledge, and supporting each other as we find the best way forward.

Sources: Bethany Lee, Retail Jeweller (April 4, 2025); Joshua Freedman, Rapaport News (April 3, 2025); Il Sole 24 Ore, Confindustria Toscana Sud, GAM

GJEPC, Jewelry Market Trends, Trade Tariffs 2025

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