Tariff Turmoil, Trade Stability, And the Gem Awards

I must admit, as someone not directly involved in diamond trading, this turbulence can be fun to analyze.

That’s not to say I’m not sensitive to the challenges of navigating these chaotic times. But the endless moving parts affecting the market provide a great mental workout — if only my body had the same stamina.

I mean, who would have thought the news flow would be so surprising and consequential at this stage?

>>> Just as the market appeared to stabilize, the European Union threatened tariffs on a range of US goods in response to US tariffs on aluminum and steel imports from the EU. The countermeasures, set to take effect in April, include loose polished diamonds, as well as rubies, sapphires, emeralds, and jewelry metals such as silver, platinum, and palladium.

Suddenly, all the tariff talk turned a little personal for the industry.  

Until now, concerns about President Trump’s trade wars have centered on their potential impact on consumer confidence and spending. Even if prices don’t rise directly, the uncertainty alone dampens sentiment.

The counterargument is that these extreme measures serve as a negotiating ploy by Trump to level the playing field, which could have long-term benefits for US households.

I certainly believe this is one big negotiation, and if the EU tariffs do come into effect in April, it would disrupt the market, even if the tariffs are imposed as a temporary measure.

>>> It’s unfortunate timing for the diamond industry, which has seen some welcomed stability in recent weeks due to reduced supply and improved US demand, leading to a slight uptick in dealer trading.

Don’t get me wrong, we’re not booming yet. But the slow market in the first two months of Don’t get me wrong, we’re not booming yet. However, the slow market in the first two months of the year was concerning. It didn't add up—sentiment among US jewelers was positive, independents had a decent holiday season, yet they weren’t placing significant orders. The difference in sentiment between the diamond wholesale and retail segments was palpable.

Why didn’t jewelers come into the market after the holiday season as they used to? One jeweler I interviewed for an article I’m working on suggested that jewelers are taking goods on memo and are prepared to wait out the “chaotic” first months of the new administration. Besides, why should they buy now when the pressure is on the suppliers.

In other words, it’s a buyers’ market. Jewelers can dictate the terms, and it’s likely they’re happy to delay their purchases as much as possible.

Perhaps, with tariffs potentially looming, that dynamic is about to change. The next two weeks may be a window for European retail jewelers and luxury houses to buy before import costs increase. That is, if they’re sourcing from the US at all. It’s more likely that the bulk of their jewelry related supply comes from centers such as India, Antwerp, Hong Kong, Israel and Dubai.

Still, the sudden tariff war into which the industry has been thrust may force retailers, particularly the European luxury jewelers, into the market and expose the true state of that segment of the diamond demand.

That may sound as unlikely as the tariffs themselves, but it may yet present buyers with an interesting dilemma if the turbulence doesn’t subside.

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Coming Up

• International Diamond Manufacturers Association (IDMA) President’s meeting: March 16 to 17

• JA New York show: March 16 to 18

• Signet Jewelers earnings: March 19

Pic of the Week

Image: The Gem Awards took place over the weekend honoring individuals and brands whose work has raised the visibility of the fine jewelry and watch industry. (Courtesy Gem Awards).

The winners pictured above from left to right were:

• Beth Hutchens of Foundrae - Jewelry Design award. 

• John A. Green, president & CEO of Lux Bond & Green - Lifetime Achievement award.

• Sam Broekema, editor in chief at the Natural Diamond Council - award for Media Excellence.

• Top right: Yael Reinhold (left) and Mildred Marcano (right), on behalf of Reinhold Jewelers - Retail Innovation award.

• Bottom right: Olivier Kessler-Gay, Chanel’s manager of watches and fine jewelry for the United States, on behalf of Chanel - award for High Jewelry Excellence.