The U.S. tariff landscape for gems and jewelry has shifted dramatically in 2025, with new reciprocal tariffs, changing exemptions, and the elimination of the de minimis threshold creating an entirely new compliance environment. For jewelry importers, exporters, and retailers, these changes have significant accounting implications that affect landed costs, inventory valuation, pricing strategies, and profit margins.

This guide covers how the current tariff environment affects gem and jewelry businesses and what bookkeeping practices you need to stay compliant and profitable.

The 2025 Tariff Landscape for Jewelry

The reciprocal tariffs introduced in 2025 imposed country-specific duty rates on goods imported into the United States. While a 90-day pause was announced for many countries in April 2025, a baseline 10 percent tariff remains in effect on most imports in addition to existing duties. Country-specific rates vary significantly: Switzerland faces a 31 percent tariff on timepieces and precious metal goods, the European Union faces 20 percent, Israel 17 percent, and Botswana—a major source of rough diamonds—faces 37 percent.

For jewelry-specific categories, imitation jewelry is subject to duties ranging from 27 to 38 percent, and pearls face a 27 percent tariff. These rates are layered on top of standard Harmonized Tariff Schedule (HTS) rates, making accurate duty calculation essential for proper cost accounting.

Key Exemptions to Track

Raw gold, platinum, and gold bars are currently exempt from tariffs regardless of the exporting country. This exemption was granted because precious metal ingot is classified as a critical mineral needed for domestic manufacturing. Unset diamonds, gemstones, and natural pearls may also be exempt when imported from countries that have signed trade deals with the United States, per a September 2025 executive order—though this exemption does not extend to cultured pearls or finished jewelry.

These exemptions create important cost distinctions. Importing raw materials and manufacturing domestically may now be significantly more cost-effective than importing finished jewelry, and your accounting must reflect these different duty treatments accurately.

End of the De Minimis Exemption

The de minimis exemption—which previously allowed imports valued at $800 or less to enter the U.S. duty-free—is being eliminated. After this change takes effect, all imports regardless of value or country of origin are subject to applicable duties. This particularly affects e-commerce businesses and small importers who relied on the de minimis threshold for low-value shipments from overseas suppliers.

Accounting for Customs Duties

Customs duties must be recorded as part of the landed cost of your inventory, not as a separate operating expense. Landed cost includes the purchase price of the goods, shipping and freight charges, insurance, customs duties and tariffs, brokerage fees, and any other costs incurred to get the goods to your place of business.

Properly calculating landed cost is critical because it directly affects your cost of goods sold (COGS), gross margin, and inventory valuation on your balance sheet. Underestimating landed costs inflates your reported margins and can lead to pricing decisions that erode profitability.

Recording Duty Payments

When you receive an import shipment and pay customs duties, record the duty payment as an addition to inventory cost rather than a period expense. If you use the accrual method, recognize the duty liability when the goods clear customs, even if the actual payment occurs later. Your chart of accounts should include a specific account or sub-account for duties and tariffs paid, which makes it easy to track total duty expense by period, supplier, or product category.

Multi-Currency Considerations

Jewelry businesses frequently transact in multiple currencies—purchasing rough stones in South African rand, processed gems in Indian rupees, and selling finished pieces in U.S. dollars. Each transaction must be recorded at the exchange rate on the transaction date, and any exchange rate gains or losses must be recognized when payment settles. Currency fluctuations can significantly affect your effective cost of goods, and your bookkeeping system must track these differences accurately.

Inventory Valuation for Precious Materials

Gems and precious metals present unique inventory valuation challenges because their market values fluctuate daily. Under the lower-of-cost-or-market (LCM) method, you compare the original landed cost of each item to its current market value and record it at the lower amount. This prevents overstating inventory values on your balance sheet when market prices decline.

For precious metals like gold and platinum that are exempt from tariffs when imported as raw materials, the landed cost may be significantly different from the same metal imported as part of finished jewelry that includes duty charges. Your inventory records must distinguish between raw materials, work-in-progress, and finished goods, each carrying different cost bases.

Physical inventory counts should be conducted at least quarterly, with reconciliation against your accounting records. Given the high per-unit value of gems and precious metals, even small discrepancies can represent meaningful dollar amounts.

Duty Drawback Programs

Duty drawback allows businesses to claim a refund of customs duties paid on imported materials that are subsequently exported, either in their original form or as part of manufactured products. For jewelry manufacturers who import materials, produce finished pieces domestically, and export the finished products, duty drawback can recover up to 99 percent of the duties originally paid.

Claiming duty drawback requires meticulous documentation: you must track each imported shipment, the duties paid, how the materials were used in production, and the subsequent export of the finished goods. Your bookkeeping system needs to maintain this chain of custody from import through manufacturing to export. The claims process involves filing with U.S. Customs and Border Protection and can take months to process, so recording the expected drawback as a receivable and tracking its status is important for cash flow management.

Tax Implications of Tariff Costs

Customs duties paid on imported goods are a deductible business expense because they become part of your cost of goods sold. However, the timing of the deduction depends on your accounting method and when the goods are sold. Under accrual accounting, the duty is included in inventory cost and deducted as COGS when the item is sold—not when the duty is paid.

The increase in tariff costs may also affect your quarterly estimated tax payments. If your cost of goods sold increases significantly due to higher duties, your estimated taxable income may be lower than prior quarters, which should be reflected in reduced estimated payments. Work with your tax preparer to adjust estimates based on your actual landed costs.

Compliance Documentation

International trade in gems and jewelry requires extensive documentation. Maintain organized records of export licenses and import permits, customs declarations and entry forms, certificates of origin for each shipment, insurance documents, shipping and freight records, duty payment receipts and brokerage invoices, and trade compliance certifications. These documents are essential for customs audits, duty refund claims, and supporting your tax deductions. A systematic filing approach—organized by shipment, date, and supplier—prevents scrambling when documentation is needed.

How Maxim Liberty Can Help

The complexity of international trade accounting for gems and jewelry requires bookkeeping that goes beyond basic transaction recording. At Maxim Liberty, our team handles multi-currency transactions, customs duty tracking, inventory valuation for precious materials, and the detailed financial reporting that jewelry importers and exporters need to maintain compliance and make informed pricing decisions.

We work with businesses across the jewelry supply chain—from rough stone importers to retail jewelers—and understand the unique accounting challenges this industry faces. Our monthly close services ensure your landed costs are calculated accurately, your inventory is valued properly, and your financial statements reflect the true profitability of your operations.

Contact us today to discuss how we can support your jewelry business’s accounting needs.

Frequently Asked Questions

How do customs duties affect gem and jewelry exporters?

Customs duties on gems and jewelry vary by country, material type, and whether the product is finished or raw. The 2025 reciprocal tariffs have significantly increased duty rates on imports from many countries, with rates ranging from 10 to 38 percent depending on the product and origin. Exporters must track duty payments, calculate landed costs accurately, and maintain documentation for compliance.

What bookkeeping challenges do jewelry exporters face?

Challenges include multi-currency transactions, customs duty tracking across different country-specific rates, inventory valuation of precious materials with fluctuating market prices, duty drawback claim management, and compliance with international trade documentation requirements.

How should jewelry businesses value their inventory?

Use the lower-of-cost-or-market method. Track each item or lot individually with its full landed cost including duties. Update valuations at least monthly and reconcile against physical inventory counts quarterly. Distinguish between tariff-exempt raw materials and duty-bearing finished goods.

Are raw precious metals exempt from tariffs?

Yes. Raw gold, platinum, and gold bars are currently exempt from tariffs regardless of the exporting country. Unset diamonds, gemstones, and natural pearls may also be exempt when imported from countries with U.S. trade agreements, though cultured pearls and finished jewelry are not exempt.

Can my bookkeeper handle jewelry import accounting?

Yes. Our bookkeeping specialists handle multi-currency transactions, inventory valuation, customs duty tracking, duty drawback documentation, and the financial reporting importers and exporters need for international trade compliance.