US defers tariffs on Indian jewelry – JCK
The Office of the United States Trade Representative (USTR) has deferred a possible 25% duty on Indian jewelry for six months, giving countries time to resolve an unrelated trade dispute.
The USTR had proposed tariffs of 25% on a wide range of jewelry, in response to taxes on digital services imposed by India on American online merchants which the agency considers “unfair and discriminatory.” The USTR had warned that the duties could come into effect soon.
The tariffs would have had serious consequences for the Indian jewelry industry; of the 40 Indian items that the USTR wanted to subject to tariffs, 17 were related to jewelry, including gold and silver items. The tariffs have also reportedly hit several Turkish jewelry items, sparking an uproar from the country’s industry. While Italy was also subject to tariffs, the list of items submitted did not include jewelry.
The move was not entirely unexpected, with Politico’s Doug Palmer predicting in May that all tariffs would likely be suspended for six months.
But the threat is not over, US Trade Representative Katherine Tai warning in a statement that imposing tariffs remains an “option” if the next few months of talks do not bear fruit.
“The United States is focused on finding a multilateral solution to a series of key international tax issues, including our concerns about taxes on digital services,” she said. “Today’s actions give time for these negotiations to continue moving forward.
The mere threat of the United States to impose a 25% tariff on jewelry has caused considerable concern in India. Speakers from the country’s highest body, the Gem and Jewelery Export Promotion Council (GJEPC), argued against the tariffs in a public hearing on May 10.
The group noted that the United States is India’s number one market for gemstone and jewelry products, accounting for 25.6 percent of its gemstone and jewelry exports.
“The imposition of the proposed 25% import duty on 17 Indian jewelry would have had a significant impact on this labor-intensive sector with loss of jobs and livelihoods and displacement of activities. to countries like China and Mexico, ”said GJEPC President Colin Shah in a statement.
“American jewelry companies are also relying on Indian companies to finance their operations by providing them with long-term credit and rating facilities, which would have major repercussions. Indian companies have established around 500 offices across the United States that provide thousands of well-paying white-collar jobs to locals; the imposition of [a] duty could affect all of those jobs as the Indo-American jewelry business becomes unsustainable. “
Above: Workers at the Hari Krishna Exports factory in India (photo courtesy of the Gem and Jewelery Export Promotion Council)
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