Editor’s Note
This article examines a recent U.S. tariff decision that exempts diamonds processed in Belgium while imposing duties on those cut in India, a move seen as a direct boost to Antwerp’s diamond trade at the expense of a key competitor.
The American president is boosting Antwerp’s business: he is exempting “Belgian” diamonds from tariffs, while heavily taxing precious stones cut in India, a major competitor of the Antwerp market.
Trump’s decision could make Antwerp’s diamond market shine again, after a sharp decline in recent years. By their own admission, Antwerp diamond traders said the negotiations were “intense.” But they were fruitful for the northern metropolis. At the last minute, Donald Trump placed polished (or cut) European diamonds in the “exception” category of his tariffs.
explains the Antwerp World Diamond Centre (AWDC), the umbrella organization for Antwerp’s diamond industry.
Trump’s aggressive trade policy towards Europe had already heavily impacted the sector. Between January and August, Antwerp exported 47% fewer cut diamonds to the United States compared to the same period last year.
The tide has turned.
rejoices Karen Rentmeesters, the head of the organization, commenting on this American decision.
As one’s misfortune is another’s happiness, Antwerp could “benefit” from the very tough trade war Donald Trump is waging against India. Currently, diamonds from Mumbai, a major competitor (along with Dubai) of the Antwerp market, are taxed at 50% to enter the United States.
On the Belgian side, they even speak of a “gigantic” competitive advantage, noting that Europe is currently the only place where this tax is 0%. It is therefore not impossible that new players will come to Antwerp, or even that Indian cutters and traders will move their operations there to avoid this tax. This could reverse the trend: in recent years, many diamond traders have left Belgium to set up in lower-cost centers, such as Mumbai in India.
Recall that the United States, which represents an enormous weight as consumers of precious stones, holds sway over the sector. More than one in two polished diamonds in the world is sold in Uncle Sam’s country. Even though they were in sharp decline, gem exports from Antwerp to the United States still exceeded $2 billion last year.
The Belgian and European authorities succeeded in convincing the Trump Administration with an argument of crystal-clear logic: a tax on European diamonds would have a detrimental impact on the American consumer’s wallet, while bringing no new jobs or investment to American soil.
develops the AWDC.
This decision by Trump is welcomed as a godsend by Antwerp diamond traders, many of whom were in “survival mode” in recent months. Not long ago, 80% of the rough diamonds produced worldwide still passed through the Flemish metropolis, but the last two years have been “terrible” for Antwerp. Between an embargo on Russian stones that it was, officially, the only one to respect and the rise of synthetic diamonds, the Belgian market has seen a 70% drop in its gem imports since 2014, according to the National Bank.