President Donald Trump announced that a minimum tariff of 10 per cent would apply to all imports to the US from 5 April; however, many nations face much higher tariffs.
The tariff rate was calculated to eliminate the US goods trade deficit with each country, and President Trump referred to the process as ‘medicine’.
Australia was hit with a 10 per cent tariff and Prime Minister Anthony Albanese has outlined a five-point plan to respond if re-elected on 3 May.
"We cannot control what challenges we face. But we can determine how we respond. Australia will always respond by defending our national interest,” he said.
Diamond disaster
India, the world’s largest source of polished diamonds, will face a 27 per cent tariff on US-bound shipments. India’s Gem & Jewellery Promotion Council (GJEPC) said in a statement that the tariffs would be a significant burden on Indian exporters and American consumers alike.
“A wave of anxiety has gripped India's diamond polishing hub of Surat, as hefty US tariffs threaten to undermine the country's gem and jewellery exports, putting at risk the livelihoods of thousands of workers,” Reuters reports.
“Business has ground to a halt in its teeming diamond market, where more than 10,000 traders and brokers gather each day, as the industry tries to figure out how matters will evolve in the coming months.”
The European Union has been hit with a 20 per cent tariff, which is expected to impact many luxury jewellery and watch brands.
This was particularly interesting given the moves made by Louis Vuitton Moët Hennessy (LVMH) chairman Bernard Arnault to strengthen his relationship with President Trump.
“On the markets, fashion stocks plunged after Wednesday’s announcement. Shares in the British brand Burberry dropped 10 per cent on Thursday and by another 6 per cent on Friday,” writes Chloe MacDonell for The Guardian.
“Kering, the parent company of brands including Gucci and Saint Laurent, also fell sharply, as did LVMH, whose portfolio includes Dior and Louis Vuitton.
“There are rumours that Prada, which was expected to be nearing its acquisition of Versace from Capri Holdings, could hit pause until the market settles.”
Where do we go from here?
Pandora has published a statement outlining its search for ways to minimise the tariff impacts, which may include price increases and changes to the structure of its supply chain.
“Pandora notes the recent decision by the US to impose tariffs on goods from several countries,” the statement reads.
“This impacts Pandora in relation to products imported to the US and originating from first and foremost Thailand but also Vietnam, India, China and a number of other countries.”
Rapaport News reports that the De Beers Group is assessing the potential impacts of tariffs and will engage with stakeholders when appropriate.
A report from WatchPro suggested that the US market is too important to the Swiss watchmaking industry to allow consumers to offset the cost of a new 31 per cent tariff.
“If investors in these companies know how the impact of President Trump’s tariffs will play out in the coming days and months, they are better informed than executives inside the watch industry, which until yesterday appeared to be merely hoping for the best rather than planning for the worst,” writes Rob Corder.
The Gemological Institute of America (GIA) has announced changes to its processes and is asking customers to be mindful of the tariffs when shipping items to US laboratories.
More reading
Buying groups fighting for better jewellery apprentice support
Jewellery Trade Shows VII: Is this the end of the industry division?
Welcome news for diamond industry as De Beers and Botswana reach agreement
Industry watchdog takes aim at misleading advertising
State of play in 2025: Australia’s Independent Jewellery Landscape
Improving jewellery sales, consumer confidence highlighted in January