For jewelry designer Jade Trau, “it’s hard to separate gold prices — which are skyrocketing partially because of the insecurity of the world — and the tariffs.” In fact, she says, these taxes on imports to the US are “driving up gold prices because there’s so much uncertainty, and I don’t really know how I’m going to deal with it.”
It is a scenario familiar to many jewelers in the US as they grapple with the reciprocal tariffs that President Donald Trump announced on April 2, which he dubbed “Liberation Day.”
Trump deemed the taxes necessary to ensure fair trade and protect American jobs, and the rates varied by country. They included a 26% levy on goods from India, where about 90% of the world’s diamonds get cut and polished. A week later, Trump declared a 90-day pause on the reciprocal tariffs for most countries, though this still left them with a 10% levy for the majority of imports. An exception was China, which continued to face a 145% tax until an interim trade deal in May slashed that to 30%.
Before the 90-day reprieve, Pandora, the world’s largest jeweler by volume, estimated the tariffs’ unmitigated impact on the brand at some DKK 1.2 billion ($178 million) a year. The US is the Danish company’s biggest market, and Pandora imports products from countries including Thailand, Vietnam, India and China. But what are the implications for other jewelers?
Taking precautions
While bullion is exempt from the tariffs, the trade relies on other materials from across the globe. Trau makes most of her self-titled brand’s fine jewelry in New York but sources gold chain, as well as the flexible gold tubing for her Plié collection, from Italy. Before the 90-day pause, the tariff on imports from the European Union was 20%.
Trau is debating whether to add a temporary surcharge to impacted designs to counter the higher production costs for as long as the tariffs are in place. She usually only raises prices once a year; she last did so in February, based on a gold price of $2,700 per ounce. In April, the price reached a record high of over $3,500. Trau will have to take action if the higher tariff returns.
“[Paying] 20% plus not hedging myself properly for gold in an attempt to be fair is going to cut away at my margin too much,” she says.
Emily Chelsea Jewelry will pass on to customers “what we have to, if we have to,” says owner Emily Phillippy. As yet, the brand’s suppliers have not upped their prices; however, the Philadelphia-based jeweler, which specializes in custom engagement and wedding rings, has been updating its own prices due to the soaring cost of gold.
The company’s eight-strong team works primarily with reclaimed natural diamonds, lab-grown diamonds from India, and sapphires from Montana and Australia. A lot of those sapphires get cut in Thailand and Sri Lanka, where the tariffs are higher. The company bought sapphires for the year at the February Tucson shows and recently decided to stockpile reclaimed diamonds to mitigate the tariffs’ impact on prices, according to Phillippy. “If we’re able to maintain business as usual, our gemstone supply will start to dwindle around October. That feels like a long time right now. A lot could happen between now and then.”
‘A chilling effect’
The uncertainty of what might occur after the 90-day pause is having “a chilling effect on business,” reports Dan Moran, owner of Concierge Diamonds in Los Angeles. “Diamond dealers are reluctant to sell, but at the same time don’t know how they should be pricing their goods now, because no one knows what the replacement cost is going to be. And on the consumer side, I’ve had a number of clients cancel orders or projects they were planning, because there’s financial uncertainty and they don’t know what their budgets will be three months from now.”
New York-based diamond jeweler Kwiat saw a 12% drop in sales during the three weeks following the tariff announcement — a decline that CEO Greg Kwiat attributes to a dip in consumer confidence. Yet Emily Chelsea has experienced the opposite effect: After Phillippy posted an Instagram reel about the tariffs, four customers emailed to move forward with purchases. And Trau’s average order value for those three weeks was 30% higher than for the three before, as people with “something expensive on their wish list” realized it was not getting cheaper, she says.
Concierge Diamonds makes bespoke jewelry, primarily bridal pieces, and is passing the increased cost of its supplies on to clients, particularly in the case of lab-grown diamonds. The company’s sales are split between lab-grown from China and India, and natural diamonds. The tariffs won’t necessarily impact whether people buy bridal jewelry, but what they buy, Moran believes — although he suggests that price rises will delay some proposals or engagement-ring purchases. Due to uncertainty about future prices, some customers are buying lab-grown placeholder stones, with plans to come back later for natural diamonds.
Diamond industry analyst Edahn Golan expects people to keep buying natural, but in smaller sizes, and predicts that the price impact of the tariffs will “encourage consumers to buy lab-grown.” The timing of the levies “couldn’t be worse for the diamond industry,” he adds; US jewelry sales had improved in the first three months of the year, following a challenging period due to Covid-19, China’s slow economic recovery, and the rise of synthetics.
Filling in the gaps
Trump argues that tariffs will boost American manufacturing. C&J Fine Jewelry Makers, which manufactures in the US and Costa Rica, has indeed received inquiries about additional business at its US factory since the tariffs came into play, according to managing director Anthony Maietta. However, “the toothpaste is out of the tube on globalization” and there is “not enough jewelry-craftsperson talent in the US to support significant amounts of reshoring,” he says. “I’m here in Rhode Island, [and] if I had a job posting for 10 jewelers, I might get two applications.”
For now, he continues, the industry is trying to “bridge this 90-day pause.” But the question of what might be on the other side is on everybody’s minds.
“The snapback of those outrageously high tariff numbers is the real disaster for the industry, because those are not workable numbers for diamond imports,” warns Kwiat. “They will quite literally kill global trade.” He thinks it more likely that the 10% tariff will remain or, “in a more hopeful scenario,” that the US will sign trade deals with parties such as India or the EU.
No doubt many jewelers will wish for another liberation day: freedom from tariffs.
Main: Illustration by Zee-Al-Eid Ahmad and Aly Akber.
