Editor’s Note
This article examines the mounting pressures on the global diamond industry, highlighting how geopolitical trade tensions and shifting market dynamics are challenging its traditional foundations.
(New York, 27th) The tariffs and global trade war initiated by US President Trump have severely impacted major markets, putting immense pressure on the diamond industry, which heavily relies on globalized supply chains and commands high prices.
Experts admit that the global diamond industry is facing a perfect storm, with tariffs being just the latest blow. According to statistics, the price of natural diamonds has plummeted by nearly 60% since reaching its peak in March 2022.
According to a CNBC report, diamonds imported into the US currently face a basic import tariff of 10%. The US market accounts for over half of the global demand for polished diamonds, making this tariff deeply impactful on the industry. If no new agreement is reached after the 90-day trade negotiation grace period set by Trump expires, additional tariffs may be imposed.
She urged the US government to exclude diamonds from tariffs, similar to raw materials like gold and copper, pointing out that “rough diamonds are also a raw material” and should receive the same treatment.
Diamonds travel through multiple countries from mine to retail shelf, being transported and processed—from African mines to Middle Eastern and European trading hubs, then to cutting and polishing centers, and finally sold by jewelers.
This complex supply chain makes the diamond industry extremely sensitive to any disruptions in cross-border trade. The emergence of tariff uncertainty coincides with the luxury sector facing multiple headwinds, including a cooling post-pandemic boom and a slowdown in the Chinese economy.
Beyond external policy risks, a deeper challenge for the industry comes from the rapid rise of Lab-Grown Diamonds (LGD). These diamonds are chemically identical to natural diamonds and difficult to distinguish with the naked eye, yet they are about 80% cheaper.
This has led consumers to increasingly choose cultivated diamonds. Jewelry brand Pandora announced in 2021 that it would completely stop selling natural diamonds, marking a significant turning point for the industry.
According to market data, the price of natural diamonds has plummeted by nearly 60% since reaching its peak in March 2022.
Despite the widening price gap, some analysts believe the market is approaching a “price stabilization boundary.”
He pointed out that consumers today can buy a 3 to 5-carat lab-grown diamond for just a few thousand dollars, while a natural diamond of the same size costs hundreds of thousands of dollars. “This price difference is creating a real market segmentation.”
For example, diamond giant De Beers announced it would shut down its lab-grown diamond brand Lightbox and double down on its natural diamond business. De Beers CEO Al Cook stated in a declaration: