International News
Chow Tai Fook Posts Soft Earnings as China’s Gold Tax Shift Clouds Outlook
Flat profits and tighter margins signal rising pressure on China’s biggest jewellery retailer after Beijing ends a key gold tax rebate.
Chow Tai Fook Jewellery Group reported a muted performance for the first half of the fiscal year, with profits landing just below expectations as the industry braces for the impact of China’s recent policy change on gold taxation. The retailer posted HK$2.5 billion in net income, marginally short of analyst forecasts of HK$2.6 billion, according to its latest filing.
While gross margin eased to 30.5%, the company noted that stronger sales of higher-margin fixed-price jewellery and the appreciation of gold helped offset the pressure. In mainland China, average selling prices for fixed-price gold pieces continued to rise, supported by Chow Tai Fook’s ongoing premiumisation strategy amid fierce competition from domestic rivals such as Laopu Gold.
The jewellery giant has been navigating a tough landscape shaped by volatile gold prices, softer consumer sentiment, and a fast-evolving competitive environment. Despite these challenges, the company said it remains optimistic about sustaining momentum through the second half of FY2026.
However, uncertainty looms after China eliminated a long-standing tax rebate on gold imports on Nov. 1, a move aimed at shoring up government revenues. The change is expected to raise gold acquisition costs and could squeeze retailer margins further if passed on to consumers.
Chow Tai Fook has already revised certain product prices to reflect rising gold rates. Even so, its stock has rallied strongly, climbing 127% year to date, signalling investor confidence despite near-term industry turbulence.
International News
AGTA appeals US Government to Scrap 10% Import Tariff on Gemstones
Trade body seeks exemption for coloured gemstones under new temporary tariff regime, with potential implications for diamonds.
The American Gem Trade Association (AGTA) has formally appealed to the US government to remove the newly imposed 10% global import tariff on gemstones, and potentially diamonds, warning of its impact on the trade.
The tariff was announced on February 20 after the US Supreme Court struck down President Donald Trump’s reciprocal tariffs issued under the International Emergency Economic Powers Act (IEEPA). In response, the administration introduced a temporary 10% import surcharge under Section 122 of the Trade Act of 1974. The measure will remain in effect for 150 days unless Congress votes to extend it, though further tariff mechanisms have not been ruled out.
AGTA has submitted a formal request to the Office of the United States Trade Representative (USTR), urging that precious and semiprecious coloured gemstones be added to the exception list under Annex I or Annex II. The association argued that these stones are not mined domestically in the US and therefore should qualify for exemption.
Previously, AGTA’s lobbying efforts contributed to diamonds and gemstones being included in Annex III — a list of products eligible for potential exemption from duties for “aligned” countries. This had placed Indian diamonds and gemstones on track for relief following a prospective US-India trade agreement. However, it remains unclear whether Annex III provisions apply under the new tariff framework that recently took effect.
If the across-the-board exemption request is denied, AGTA has asked the USTR to confirm whether Annex III remains a viable pathway for country-specific tariff relief on coloured gemstones.
While the current petition focuses on coloured gemstones, AGTA noted that trade experts believe any exemption granted in this category could effectively extend to diamonds, as seen in past trade agreements such as the US–European Union deal.
“We will continue to work tirelessly toward eliminating tariffs on gemstone imports into the US. We remain fully committed to this effort — giving up is not an option,” said AGTA President Bruce Bridges and CEO John Ford.
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