Luxury Briefing: From diamonds to duties, tariffs are cutting into fine jewelry

Tariffs introduced in April — many of them surprise moves by the U.S. administration — have hit the jewelry industry where it hurts. A 145% levy on Chinese imports remains in place, with proposed duties as high as 37% on diamonds from Botswana and 26% on polished stones from India. While some of those have been paused during a 90-day review period, brands are scrambling.

“It’s a very confusing and complicated time,” said Olivia Landau, co-founder of The Clear Cut, a fine jewelry brand that manufactures in the U.S. “No one really knows what’s going to be implemented. First it’s panic, then it’s waiting, then a pause, then something else. It’s week-to-week planning.”

The Clear Cut, which generates eight-figure annual revenue, has seen costs spike across its supply chain over the last three months. “Our packaging from China was going to be 145% more,” said Landau’s co-founder and husband, Kyle Simon. “And that’s just for boxes. That doesn’t include the diamonds.”

“Nine out of 10 diamonds are cut and polished in India,” he added. “There are virtually no diamonds mined in the U.S.” The original 37% tariff on rough diamonds and 26% on polished ones triggered industry-wide panic. “There’s no domestic fallback. You can’t just switch to American-mined diamonds. That doesn’t exist.”

Major diamond suppliers, including those affiliated with De Beers and Alrosa, as well as leading Indian manufacturers in Surat, rushed to export inventory before the tariffs hit, creating a short-term surplus. “There are now hundreds of millions of dollars in diamonds sitting in the U.S.,” Simon said. “But after 90 days? Who knows.” The Clear Cut also made a bulk order, but in a smaller quantity.

And starting May 2, another cost pressure arrives: the tightening of “de minimis” rules. The rule, which previously allowed imports valued under $800 per shipment to enter the U.S. duty-free, has been used by jewelry brands to sidestep taxes on small, high-value shipments like loose stones and packaging. “Sub-$800 packages used to fly under the radar,” Simon said. “Now, everything will be flagged. For us, that’s death by a thousand cuts.”

The Clear Cut exclusively sells through its website and a New York City showroom, meaning every element of the customer experience— from stone to box — is tightly controlled. “We don’t have physical retail. So the packaging and the unboxing are part of the luxury,” said Landau.

Meanwhile, the price of gold is compounding the chaos. It jumped from $2,000 an ounce in early 2023 to over $3,200 last month. For pieces like engagement rings, where the stone makes up 90% of the cost, the gold alone can make prices unworkable. “Sometimes the tariff is more than the brand makes,” said Simon. “We’ve had to raise prices 10%, and that doesn’t even cover it all.” To offset soaring gold costs, The Clear Cut is also focusing on lighter-weight designs and increasing its use of 14-karat gold across collections, while clearly communicating pricing shifts to customers through email and social.

While lab-grown diamonds are experiencing significant market growth, with projections estimating an increase from $25.89 billion in 2024 to $74.45 billion by 2032, The Clear Cut remains committed to natural diamonds. It emphasizes their rarity and traditional appeal, and continues to cater to clients who value the timelessness and perceived investment value of natural stones.

In Texas, Jamie Turner Designs, which makes high-end jewelry in the $5,000-$40,000 range, is facing the same storm, but with a different setup. “We knew if we wanted to do high-end jewelry in the U.S., we had to think differently,” said head jeweler Patrick Dobbs, who joined the company in 2022. “So we built for efficiency, [computer-aided design] programs, 3D printing and optimizing every step to minimize labor.”

Dobbs employs 14 full-time bench jewelers and plans to grow that number to 20 by summer. Dobbs said the company is able to expand despite industry-wide labor shortages thanks to its in-house training model and strong internal culture. “We train everyone ourselves,” he said. “I’ve been a bench jeweler for 35 years. One of our setters is my daughter.”

Jamie Turner sells through its own site, Neiman Marcus and a network of private clients and trunk shows. Dobbs said the company’s model has worked because of the control it’s maintained. “There are very few high-fashion jewelry brands making everything in the U.S.,” he said, referring to the fact that most brands have moved production out of the U.S., as labor costs are cheaper in Asia. “You can’t throw labor at a problem here. You have to outthink it.”

The domestic labor pool is another bottleneck. “It would take 10 years to build the workforce we’d need,” said Simon. “We’ve looked into it. You can’t mass manufacture jewelry here. The people just aren’t there.”

Even LVMH is facing friction. Tiffany & Co. makes around 60% of its jewelry in New York, Kentucky and Rhode Island. But even that model isn’t fully self-contained. “They still rely on imported stones and parts,” said one luxury strategist. “If they’re calling a $50 million brooch made with global parts ‘Made in the USA,’ fine. But let’s not pretend that solves the tariff issue.”

The push toward domestic manufacturing isn’t new, but it’s struggling. A recent Reuters investigation found that LVMH’s Louis Vuitton facility in Texas, launched with White House fanfare in 2019, has faced high turnover and output issues. Scrap rates at the workshop reached 40%, nearly double the industry average. “You can’t move Place Vendôme to Texas and expect the same result,” the strategist said.

Still, the industry is adapting. Some brands are rerouting supply chains to Vietnam and Mexico. Others, like The Clear Cut, are trying to absorb costs or split them with vendors. But it’s clear the business models built on ultra-cheap offshore labor and tariff-free global movement are breaking down.

“If you’re thinking about buying jewelry, do it now,” Landau added. “What’s already in the U.S. won’t be subject to these new rules. But after May 1? Nobody knows.”

LVMH earnings: Luxury brands are at a tariff crossroads as consumer confidence and class divide under pressure

As U.S. tariffs edge closer to reality, luxury brands are confronting hard questions about who their customer really is and whether that customer is still willing to pay.

According to Robin Mellery-Pratt of brand strategy company Matter, the impact of tariffs cannot be separated from broader shifts in consumer psychology. Matter advises brands like Chloé, Ralph Lauren, Versace and Jimmy Choo in a global capacity. “There’s $1.3 trillion in credit card debt and $1.8 trillion in auto debt in the U.S. economy right now,” he said. “The average household could see a $4,700 rise in annual costs due to tariffs. That’s a compelling hit to confidence, especially for aspirational shoppers.”

Mellery-Pratt pointed out that many leading luxury brands rely on the top 1-3% of their customers for up to 50% of sales, but the other 50% comes from aspirational buyers. “No luxury brand can survive on its ultra-wealthy clientele alone. That 50% in the middle is the fragile foundation, and it is deeply exposed right now.” 

According to the latest consumer spending reports from NRF’s Retail Monitor announced on April 14, U.S. retail sales rose 0.6% in March, driven partly by consumers stocking up ahead of anticipated tariff-related price increases. In February 2025, U.S. retail sales experienced a modest rebound, increasing by 0.2% following a 1.2% decline in January. 

For LVMH, first-quarter 2025 earnings, announced on April 14, showed mixed signals. While fashion and leather goods were flat, weakness appeared in spirits and beauty. CFO Cécile Cabanis acknowledged that U.S. demand held strong, but flagged risks: “The aspirational customer is more vulnerable in times of economic uncertainty.”

Online platforms like TikTok and Instagram have added pressure to the conversation as manufacturers in China claim luxury brands are producing goods there and marking up products. Mellery-Pratt noted that 80% of luxury growth in 2024 came from price increases, not volume. With the average European luxury item up 52% in price, social media backlash, often citing alleged manufacturer margins exceeding 90%, has escalated. “The question of ‘is it worth it?’ is gaining ground,” he said.

The path forward is complex. While LVMH has U.S.-based manufacturing for brands like Tiffany, scaling it is another matter. “You can’t replicate centuries of savoir-faire in Texas overnight,” Mellery-Pratt said.

On background, one expert noted that recent remarks by Donald Trump about helping Apple CEO Tim Cook navigate tariffs underscore the importance of direct corporate lobbying. “Luxury companies may need to unite, not as competitors, but as a collective industry voice, if they want exemptions or relief,” the expert said. “Individually, they’re not large enough. Together, they might just get a seat at the table.”

Executive moves

• Jean Paul Gaultier has named Duran Lantink creative director, marking the end of its guest designer era. The Dutch designer, known for radical upcycling, his 2018 “vulva pants,” and recent Woolmark and LVMH Prize wins, will debut his first ready-to-wear collection in September 2025 and haute couture in January 2026.
• Effective this month, Brioni has named Flavio Cerbone CMO ahead of the brand’s 80th anniversary. Brioni tapped the former Church’s communications head, who joined the Prada Group in 2013 after a stint at Marcolin, to oversee global marketing, events, social, image, PR and media. This comes as the Kering-owned house sharpens its identity under CEO Mehdi Benabadji and expands into womenswear under Norbert Stumpfl.
• Following the April 23 completion of Mytheresa’s acquisition of YNAP, Michael Kliger will become CEO of the new parent company LuxExperience; Heather Kaminetsky will take over as CEO of Net-a-Porter; Toby Bateman will returns as CEO of Mr Porter; Mirko Nobili will be promoted to CEO of Yoox; and Sabah Naqushbandi will remain managing director of The Outnet.
• SMCP Group has named Kleine Tan CEO of SMCP Asia, effective immediately, succeeding Jimmy Lam as the French fashion group, parent to Sandro, Maje, Claudie Pierlot and Fursac, refocuses its China strategy. The former Loewe Asia president brings over two decades of luxury retail experience across the region and will report to SMCP CEO Isabelle Guichot from Hong Kong.
• Anoushka Borghesi has been promoted to global communication director at Giorgio Armani, a newly created role she steps into after 14 years at the company and a decade as head of media and PR.

News to know

• Fashion designer Paul Smith is making his Milan Men’s Fashion Week debut on June 21, taking his show from Pitti Uomo to the official calendar, marking a milestone after 22 years with a showroom in the city.
• Ambush founders Yoon Ahn and Verbal reacquired full ownership of the brand from New Guards Group on April 11. In doing so, it joins Alanui, Off-White and Palm Angels in designer-led buybacks from NGG as the company undergoes restructuring following its CNC filing in Italy.
• Rick Owens will open his largest-ever retrospective, Temple of Love, at Paris’s Palais Galliera on June 28. Owens will serve as artistic director for the show, which spans his career and features over 100 looks, 30 brutalist sculptures and a re-creation of the California bedroom he shared with Michèle Lamy.

Listen in

The Glossy podcast has undergone a refresh, with new episodes combining our Week in Review segments and C-suite interviews now dropping on Fridays. On the latest podcast, the Glossy fashion team discussed the changing face of the department store, as well as tariffs and the Versace acquisition by Prada.

Read on Glossy
Small fashion brands are feeling tariff impacts and offering advice. Why Von Dutch is sticking to licensing to ride out tariff impacts. How “de minimis” is affecting TikTok Shop. Yves Saint Laurent is betting big on fragrance.