One issue that has received a lot of press this year is the tariff war that the U.S. has been embroiled in with China. Tariffs increased in September, and as of presstime (early November) a new round of tariffs is scheduled to go into effect mid-December.
However, Dupuy points out that the issue hasn’t directly affected much of the industry yet.
“Tariffs are not as big for the jewelry industry as a lot of people think,” says Dupuy. “Of the $300 billion [of goods affected by the tariffs], jewelry is $3.4 billion, which is a little over 1 percent.”
Of that $3.4 billion, as a percentage of all U.S. jewelry imports, it accounts for 15 percent of finished jewelry, 1 percent of diamonds, and 28 percent of gemstones.
“The bigger companies probably are going to have bigger problems because they’re procuring more from China,” he adds. As a result, “a lot of major retailers are moving production out of China to Thailand, Vietnam, and India, but it takes a while to make that supply chain transition.”
Even if your business isn’t currently feeling the effects of the tariff war, it doesn’t mean it won’t in the future. To address the situation, Hill recommends jewelers bring pressure on their elected officials “to enact smart international policy,” she says. “If we don’t bring pressure, it’s not the representatives who are going to suffer; it’s going to be small business. You need to get concerned.”
And keep in mind the biggest problem with the tariffs: They affect consumers’ psyche.
“I read some economic forecasts that it’s probably trimming half a percent from the GDP,” says Dupuy. “The trickle-down effect will hurt us more than the cost of goods. And the longer it goes on, the bigger the impact it’ll have.”