Diamond Foundry Sues US Authorities

RAPAPORT... Lab-grown producer Diamond Foundry has sued the US government over President Donald Trump's tariffs on Chinese goods.The San Francisco-based company filed a complaint against US Customs and Border Protection and the US Trade Representative on March 17. It alleged the government failed to issue a list of affected products within 12 months of initiating an investigation into China's intellectual property practices that led to the tariffs, as is required by the Trade Act of 1974. The agencies exceeded their powers by enacting the duties without those disclosures, Diamond Foundry argued. In 2018, the Trump administration imposed import duties of up to 25% on a range of Chinese products, including lab-grown diamonds. The tax hike had a big effect on Diamond Foundry since it outsources cutting and polishing to other countries such as China. This technically turns the diamonds into Chinese merchandise, requiring payment of the tariffs.The company - which grows its man-made stones in the US - claims the duty payments exceed the cost of the manufacturing service added in China. This stems from the fact that the tariff is calculated as a percentage of the polished diamond's market value on reimport, rather than on the much lower value of the manufacturing contract service, the company explained.Diamond Foundry is following the lead of companies in other industries contesting the tariffs. In late 2020, Tesla sued to block the Trump administration from collecting tariffs on parts the electric car maker imports from China, the Los Angeles Times reported. The Biden administration adopted these Trump tariffs without revisiting them, Diamond Foundry noted. The USTR was not immediately available for comment.Image: Lab-grown diamonds. (Diamond Foundry)