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The United States Trade Representative (USTR) has finalized its investigation into the forced-labor practices of 60 trading partners, and imposed new tariffs that include the gemstone and jewelry sectors.
The US has introduced import tariffs of 10% or 12.5% on a variety of products, based on countries’ level of compliance, under the title “Combating Forced Labor in Global Supply Chains,” the American Gem Trade Association (AGTA) said last week. According to the USTR, some products are exempt from the new tariffs. These are listed in the annex to the 431-page Federal Register notice and include goods that the US cannot produce in large enough quantities, it added.
The tariffs the US administration has issued under Section 301 of the Trade Act include exemptions for loose colored precious and semiprecious gemstones, natural pearls and diamonds from the European Union, Cambodia, Indonesia, and Taiwan. However, supply from Hong Kong and China is subject to an additional 12.5% tax plus previous 301 duties, while goods from Australia, Colombia and Thailand incur a 12.5% levy. The duty on gems and jewelry from India remains at 10%.
India has a competitive advantage over higher-tariff locations such as Hong Kong, China and Thailand. Yet it is at a disadvantage compared to the EU, which includes Antwerp, the world’s leading diamond-trading hub, the Gem and Jewellery Export Promotion Council (GJEPC) pointed out.
“Imposing of 10% US tariff under the new Section 301 regime…is not at all justified [and] remains a challenge for India’s gem and jewelry exports, particularly as key competing trading centers in diamond continue to enjoy duty-free access for natural diamonds,” said GJEPC chairman Kirit Bhansali. India’s position in the lower tariff band offers it some relief in terms of jewelry, but securing bilateral trade agreement and a tariff exemption for natural diamonds and colored gemstones remain key priorities, he continued.
In May, AGTA and members of Congress urged the administration to exempt loose precious and semiprecious colored gemstones from all tariffs. The association intends to continue advocating for the implementation of duty-free imports from key sourcing countries, including India, Thailand, Sri Lanka and Colombia, AGTA said.
Image: Shipping containers. (Shutterstock)
