While there are reports of a general slowdown in the Chinese market, and a degree of concern of the possible impact of the mounting trade war between China and the United States, the immediately worry about Hong Kong are the protests that have swept over the city in recent weeks. At their peak, they brought traffic at the city’s giant international airport to a complete stop.
Toward the end of August the organizers of the show, Informa, issued an unequivocal statement, saying that the event would go on next month as planned, despite the request of some exhibitors requests to have it postposed.
Among the organizations that has raised the possibility of delaying the opening of show were the Gem & Jewellery Export Promotion Council (GJEPC) of India, the Antwerp World Diamond Centre (AWDC) and the Israel Diamond Institute (IDI).
In its response to the various national organizations, Informa said that there are positive signs indicating that the situation is cooling down. It added that the Hong Kong’s Airport Authority had received a special injunction prohibiting protesters from entering the airport, and in any case the company was putting in place “contingency plans … for virtually every scenario during the different phases of our show.”
Concern had been expressed about a fall in visitors to the show, particularly from mainland China, Informa said it was making “special transportation arrangements” for visitors from the Chinese mainland. It also assured exhibitors that the existing insurance policies would cover losses caused by rioting.
CHINA AND HONG PRECIPATE FALL IN DIAMOND PRICES
According to the Rapaport News Service, the U.S.-China trade war, the protests in Hong Kong and a depreciation of the yuan, instigated by the Chinese government in response to the Trump administration’s tariff war, has led polished diamond prices to soften.
According to the organization, its RapNet Diamond Index (RAPI) for 1 carat was down 0.4 percent during the month. Since the start of the year, the RAPI for 1-carat goods has retreated by about 4.3 percent, Rapaport noted.
The organization’s other key indexes are in the red as well. The RAPI for 0.3 carats was down 0.5 percent in August and 15 percent since the start of the year.
The immediate concern about Hong Kong are the protests that have swept over the city in recent weeks.
The depreciation of the yuan, possibly instigated by Beijing in response to the Trump Administration’s tariffs, are making diamonds, which are pegged to the U.S. dollar, more expensive in China.
The RAPI for 0.5-carat diamonds fell 0.9 percent in August and 7.6 percent since January, and the RAPI for 3 carats saw a 2.1 percent fall in August and 15.3 percent reduction in value during the first eight months of the year.
U.S JEWELRY TRADE JOINS CALL TO AVOID FURTHER TARIFF HIKE
In the United States, members of the jewelry industry joined representatives of other retail sectors in an appeal to President Donald Trump to postpone an additional tariff increases on Chinese goods, which he has threatened to put into effect on October 1
This would follow the latest skirmish in the trade war, which took place on September 1, when the United States placed tariffs of 10 percent to 15 percent on a range of imports from China that thus far had managed to avoid tariffs, including most jewelry, diamond and gemstone items. But the U.S. Trade Representative says that intends to raising all tariffs to between 25 percent and 30 percent on October 1.
“We are writing with an urgent request that you postpone all tariff-rate increases,” the Americans for Free Trade Coalition, wrote in their letter to President Trump. “[They] come at the worst possible time, right in the middle of the busy holiday…period. Action is needed by you to protect American businesses, workers and consumers.”
“A large portion of holiday merchandise will still be hit by September and October tariff increases at an even higher rate than was originally anticipated,” the letter noted. “With some products facing tariffs as high as 30 percent, many businesses will have no choice but to pass along those costs to consumers. Price increases will likely hit shoppers just as they are making their holiday purchases.”