Navigating the Storm: Global Jewellery and Gemstone Sector Confronts New US Tariffs
As the August 1, 2025, deadline looms, the global jewellery and gemstone industry is bracing for a seismic shift. New reciprocal tariffs imposed by the United States are forcing companies from Brazil to Southeast Asia to fundamentally rethink their strategies. With high-stakes negotiations for reductions still underway, the prevailing uncertainty has sent ripples of concern through supply chains, threatening to reshape the landscape of this glittering, multi-billion-dollar trade. This wave of protectionism, aimed at rebalancing trade deficits, has left many nations facing steep import duties that could redefine their competitiveness in the critical U.S. market.
A World on Edge: Global Reactions to the US Tariff Storm
The tariffs are not a monolith; they represent a complex web of duties that vary significantly by country, creating a patchwork of challenges and, for some, unexpected opportunities. As the industry scrambles to adapt, leaders from every major production hub are weighing their options, from absorbing costs and diversifying markets to relocating manufacturing facilities.
Brazil’s Emerald Empire Faces a Steep Climb
For Brazil’s vibrant gemstone sector, the threat of a 50% tariff on its imports to the U.S. is a dark cloud on the horizon. Marcelo Ribeiro, president of the renowned Belmont Emeralds, minced no words, describing such a duty as nothing short of an “economic sanction.” He argues that a tariff of this magnitude would render direct business with the U.S. “virtually unviable,” forcing a dramatic restructuring of how Brazilian gems reach the global market.
The most likely outcome, Ribeiro notes, would be a strategic pivot: rough stones would be exported to processing hubs like India to be cut and polished. Once manufactured in a third country, they would no longer be classified as Brazilian goods for tariff purposes, thus bypassing the steep duty. While this move offers a practical workaround, it means Brazil would lose out on the significant value added during the manufacturing process.
Although Belmont’s core business of rough emeralds—95% of which are already sent to India for cutting—remains largely insulated, the broader impact on Brazil’s finished gem and jewellery manufacturers could be devastating. “This level of tariff places them at a major disadvantage in the US market,” Ribeiro adds, highlighting the threat to a nation that sends approximately 30% of its total gemstone production to American consumers. The situation is so dire that since the measure’s announcement, an estimated 60% of Brazilian natural stone shipments to the U.S. have been suspended. The Brazilian government is in active and urgent negotiations, hoping to find a “more balanced solution” to what could be a mutually harmful economic standoff.
Sri Lanka’s Sapphire Shores Brace for Waves
Sri Lanka, celebrated for its exquisite sapphires, is confronting its own tariff battle. An impending 30% duty on Sri Lankan goods entering the U.S. threatens to disrupt a historically vital trade relationship. Armil Sammoon, Chairman of Sapphire Capital Group, confirms the industry is anxiously awaiting the results of ongoing government negotiations. “The impact is going to be there for sure,” he stated, voicing a concern that echoes across the island nation’s gem sector.
There is a glimmer of hope, however, rooted in a simple fact: “gemstones are not mined or manufactured in the US, so hopefully there is going to be some leeway.” This makes the tariff a direct cost to be borne by American consumers and retailers, rather than a measure to protect a domestic industry. This sentiment is particularly urgent as the proposed tariff could jeopardize the livelihoods of over 600,000 workers in Sri Lanka’s gem and jewellery value chain.
The stakes are high. In the first five months of 2025, Sri Lanka’s exports to the U.S. surged to US$7 billion, a 7.14% increase from the previous year, demonstrating the market’s importance. While Sri Lankan exporters have cultivated strong markets in China, Hong Kong, and Europe, Sammoon admits the U.S. is a consumer giant that “we cannot disregard.” The immediate challenge is ensuring products can still reach American shores, even if it means passing some of the costs onto the end consumer.
The European Union’s Old World Charm Meets New World Tariffs
Across the Atlantic, companies in the European Union (EU) are watching the trade developments with equal concern. After an initial proposal of a 30% tariff, recent negotiations have reportedly resulted in a preliminary deal for a 15% rate. While a reduction, this still represents a significant jump from the low single-digit tariffs previously enjoyed.
For German gemstone manufacturer Nebert, the new duties pose a strategic crisis. The U.S. is a cornerstone market, and the Tucson gem show in Arizona is a critical event for their business. “Tariffs will make our goods more expensive for US customers,” says manager Sascha Nebert. “Our customers are unlikely to pay these import duties, and we cannot afford these either.”
The dilemma is particularly acute for international exhibitors like Nebert. The prospect of paying a hefty tariff on all the goods brought to a show, without any guarantee of what will sell, is a prohibitive financial risk. This logistical and financial nightmare could force the company to abandon the Tucson fair altogether, cutting off a vital channel to the American market.
Southeast Asia: A Complex Tapestry of Challenge and Opportunity
The tariff situation in the Association of Southeast Asian Nations (ASEAN) is a complex patchwork of revised duties, reflecting a series of intense negotiations. While many rates were reduced from their initial shocking highs, they remain substantial. As of the latest reports, tariffs stood at 36% for Cambodia, 40% for Laos and Myanmar, 20% for Vietnam, and 19% for Indonesia. Thailand’s rate remained unchanged at a punishing 36%, while tariffs on goods from the Philippines and Malaysia also saw adjustments.
ASEAN’s Balancing Act Amid Shifting Tides
Suttipong Damrongsakul, chairman of the ASEAN Gems and Jewellery Trade Association (AGJA), asserts that these tariffs are eroding the region’s crucial cost competitiveness, particularly for volume-driven products like gold and silver jewellery and mass-market fashion pieces. This pressure is forcing a strategic evolution. “Manufacturers and exporters relying on volume-driven markets face acute pressure, prompting strategic shifts toward value-added products and premium sourcing to survive,” he explains.
During a brief three-month period when a lower 10% interim tariff was in effect, ASEAN exporters managed to gain ground against competitors in China and Hong Kong, who faced much higher duties. Now, however, the uncertainty has returned. Damrongsakul notes that some U.S. buyers are pausing transactions, adopting a “wait-and-see approach” until the tariff situation stabilises. Despite these shocks, he remains optimistic about the region’s long-term strength, pointing to a market valued at nearly US$17.4 billion in 2024 and growing annually.
Thailand’s Craftsmanship Under Pressure
For Thailand, a powerhouse in jewellery manufacturing, the 36% tariff is a significant threat to its competitiveness. According to Sumed Prasongpongchai, director general of the Gem and Jewelry Institute of Thailand (GIT), the original equipment manufacturers (OEMs) are the most vulnerable. “These manufacturers typically operate on slim margins and depend on large-volume, price-sensitive contracts with US buyers,” he says. The tariff makes it nearly impossible to maintain profitability without price hikes that risk alienating clients.
This has led to a dual strategy of market diversification and value enhancement. Many Thai exporters are now focusing more on resilient markets in China, the Middle East, and other parts of Southeast Asia. To stay competitive in the U.S., firms are improving their offerings through bespoke designs, stronger branding, and international certifications to justify a higher price point.
The nation’s thriving silver jewellery sector, which saw exports surge 11% to US$900 million in the first five months of 2025, also faces uncertainty. Sidthisak Limvatanayingyong, president of the Thai Silver Exporters Association, fears that while loyal customers may remain, price-sensitive buyers might shift to sourcing from countries with lower tariffs. “Uncertainty around when and how the tariffs will be applied… complicate long-term planning for both buyers and Thai manufacturers,” he adds.
Hong Kong: Pragmatism and Agility in the Face of Tariffs
Hong Kong’s jewellery manufacturers are meeting the challenge of a 30% tariff with characteristic pragmatism. Tommy Lee, associate chairman of the Hong Kong Jewellery Manufacturers’ Association (HKJMA), acknowledges the pressure on supply chains but notes a swift adaptation. “At the initial imposition of tariffs… there was palpable concern,” he shares. “But over the last one to two months, business has been picking up. Both buyers and suppliers have adapted quickly.”
Lee, whose own family business sends 40% of its exports to the U.S., emphasizes that adaptation is the only path forward. “Even with high tariffs, we have to continue conducting business,” he says. “What we can do and must do is to sharpen our focus on product quality and customer relations.”
Manufacturers are also leveraging Hong Kong’s inherent strengths as a premier trading hub: its status as a free port and its world-class legal, banking, and logistics infrastructure. Furthermore, many firms had already mitigated risk by relocating manufacturing to Southeast Asia and India. However, this strategy now faces its own hurdles as those countries grapple with their own new tariffs. Lee points out a nuanced reality: high-volume, machine-led production is still cost-effective in Southeast Asia, but for high-end, bespoke items requiring skilled artisans, mainland China often remains the superior choice.
