【New York Cit】Tariffs Putting Gemstone Market Under Threat, AGTA Says

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Editor’s Note

U.S. tariffs are creating unprecedented challenges for the colored gemstone industry, as highlighted by AGTA CEO John Ford. This article summarizes his urgent warnings from a recent industry seminar.

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Tariffs Pose Unprecedented Threat

U.S. tariffs represent the most significant threat the colored gemstone industry has ever faced, according to John Ford, CEO of the American Gem Trade Association (AGTA). He made these remarks at a seminar titled “Talking Tariffs” held on July 23 in New York City.

Lobbying for Exemptions

Ford stated that AGTA has been engaging with members of Congress and the Trump administration to seek exemptions for colored gemstones from the current tariffs.

“Loose colored gemstones are a little different from diamonds in that we are a net export,” he noted. “That distinguishes us from other parts of the jewelry industry.”

Frank Phifer, senior vice president of AGTA’s lobbying firm Hecht, Latham, Spencer & Associates, argued that since most critical minerals are exempt from tariffs, colored gemstones should be added to the list of duty-free products.

“Loose colored gemstones are not geologically available in the United States,” Phifer said. “Without the availability, these tariffs become punitive and disrupt the supply chain.”

Ford added that not only are the raw materials not found domestically, but the U.S. also lacks the capacity to cut them economically.

“An example is the Montana sapphire,” he said. “They have to be cut overseas because the industry to cut that melee economically does not exist here.”
Mitigation Strategies

Phifer explained that until exemptions are granted—which is uncertain—importers can use duty-deferral mechanisms.

“If you bring a good into a Customs-bonded warehouse at a 50% [tariff rate] from Brazil and you store the goods without paying duty, if the tariff rate drops in two years, you can import it to the United States and pay the lower duty,” he said. “A temporary importation under bond [TIB] can be used [to bring in] commercial samples to take orders on merchandise, though there’s a caveat that they have to be either imported or exported within a year. Your Customs brokers and your attorneys can figure out what kind of duty-deferral mechanism would be good for your specific product.”

Ford mentioned that some buildings in Manhattan’s Diamond District (47th Street) are designated free trade zones, allowing importers to defer tariff payments until items leave the premises.

“We have 18 members in this building [580 Fifth Ave.], which is typically a free trade zone,” Ford said. “We have an AGTA member that’s volunteered to be the test case for us. We’re going to make application for the designation, and then we’re going to go through the process of importing some goods and see how it all works. Then we’re going to share [the information] not only with our AGTA members but our brothers in the diamond business.”
“Unfortunately, if you’re not in a free trade zone, that doesn’t help you. But what we’re trying to do is find different ways to mitigate things where different AGTA members can work together,” Ford continued. “While we want to get rid of the [gemstone] tariffs, we also have to live with them while they’re here.”
Key Q&A Highlights

The panelists addressed questions from AGTA members:
• Noam Gerber, sales manager for shipper Malca-Amit, explained companies have two options for tariff payments: through their broker’s invoice or dealing directly with Customs.
• Gerber clarified that Customs defines a stone’s “country of origin” as where it was cut, not mined, and typically bases tariffs on the item’s value, not overseas labor costs. Panelist Roland Krainz added that if a piece is cast domestically then sent overseas for work, tariffs are generally calculated on the additional labor cost.
• Gerber noted TIBs are currently used for sending goods to trade shows and labs, but other applications are being explored.
• Gerber stated that if an item is imported into the U.S. and then re-exported, shippers generally have three years to re-import it duty-free, which requires declarations from both the foreign shipper and importer.

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⏰ Published on: August 19, 2025