Key points
- According to Somchai Phornchindarak, President of the Federation of Thai Gem, Jewellery and Precious Metal Associations, the US remains one of the largest markets for Thai jewellery, with exports still showing strength in the first half of the year.
- With global demand for luxury goods rising post-pandemic and Thailand’s economy still recovering, missing out on jewellery exports to the US market could have long-term ramifications that go beyond lost jobs—it could erode national identity in a sector where Thai craftsmanship has long been globally respected.
- Thailand’s once-thriving gem and jewellery industry is bracing for a potentially devastating blow as the United States prepares to impose new tariffs on imported Thai goods starting August 1.
Bangkok Gems News: Tensions Rise in Thai Gem and Jewellery Sector
Thailand’s once-thriving gem and jewellery industry is bracing for a potentially devastating blow as the United States prepares to impose new tariffs on imported Thai goods starting August 1. This looming deadline could reshape the landscape of one of the kingdom’s most treasured export sectors and put hundreds of thousands of jobs in jeopardy.
The US tariffs on imported jewellery products is a major threat to the local Thai jewellery industry
Image Credit: JGABThailand (Informa)
According to Somchai Phornchindarak, President of the Federation of Thai Gem, Jewellery and Precious Metal Associations, the US remains one of the largest markets for Thai jewellery, with exports still showing strength in the first half of the year. That surge, however, was likely fueled by American buyers rushing to stockpile inventory before the expected tariff hike kicks in. In this Bangkok Gems News report, Somchai warned that while exports may look good for now, the worst is yet to come once the tariffs take full effect.
New Tariff Rates Spell Trouble for Local Industry
Under the current trade structure, Thai gems and jewellery are already subject to a Most Favoured Nation (MFN) tariff rate averaging between 6% and 7%. In April, Washington raised that rate to 10% as part of a broader global trade strategy. Now, industry leaders fear a hike to as high as 25% is imminent.
Somchai noted that it’s extremely unlikely Thailand will secure a reduced tariff rate like Vietnam, which enjoys a 20% cap after agreeing to major concessions, including slashing tariffs on American imports and signing large-scale purchase agreements for US goods. “Matching that would be economic suicide,” said Somchai, pointing out that Thailand cannot make similar commitments without risking severe damage to its agricultural sector—a critical pillar of the Thai economy.
Another thorn in the side of US-Thai trade relations is the suspicion that Chinese products are being rerouted through Thai companies to avoid tariffs, a practice that has drawn scrutiny from Washington. Additionally, geopolitical tensions, including America’s interest in expanding its military presence in Southeast Asia, are adding further complexity to negotiations.
Thailand Loses Ground to Regional Competitors
Thailand is already feeling the heat from neighboring Vietnam, which has become a new hub for global jewellery manufacturing. Many international investors have relocated their production facilities from Thailand to Vietnam, where incentives and trade deals with the US have made operations more lucrative.
This growing regional competition threatens to cripple Thailand’s global standing in the jewellery trade. With Indian, Chinese, and Vietnamese exporters potentially facing lower tariffs or enjoying trade advantages, Thai manufacturers could find themselves priced out of the US market entirely.
A Workforce on the Brink
The human cost of this impending trade shift could be staggering. Once employing over a million skilled workers, the Thai gem and jewellery sector now supports between 700,000 and 800,000 individuals. A 25% tariff could be the final nail in the coffin for many of these jobs.
“If we lose these workers, we lose the soul of our industry,” Somchai lamented. “Attracting younger generations into the field is already difficult. They’re looking for faster income in tech or service industries. If these artisans leave, the legacy knowledge passed down through generations will vanish—and we may never get it back.”
Urgent Calls for Government Action
Industry stakeholders are urging the Thai government to act swiftly. Whether through trade diplomacy or economic stimulus packages to buffer the blow, many believe intervention is essential. Without urgent and coordinated action, Thailand may permanently surrender its long-held place in the global jewellery arena.
The timing couldn’t be worse. With global demand for luxury goods rising post-pandemic and Thailand’s economy still recovering, missing out on jewellery exports to the US market could have long-term ramifications that go beyond lost jobs—it could erode national identity in a sector where Thai craftsmanship has long been globally respected.
For the latest on the local Thai Jewellery industry, keep on logging to Bangkok Gems News.
