Editor’s Note
This article examines the immediate and severe impact of recent US tariff announcements on global trade flows, with specific data showing an 85% plunge in certain sectors. The ripple effects, including a projected halving of demand and significant import disruptions, underscore the high-stakes nature of current trade policy shifts.
A warning light has turned on for the global diamond industry due to the tariff war by the Donald Trump administration in the United States. Diamonds are primarily processed in India and exported to the US. Concerns over declining profitability have intensified as the Trump administration decided to impose reciprocal tariffs of up to 26% on India, resulting in a sharp decline in wholesale market transactions.
According to the Financial Times (FT) on the 15th (local time), the daily shipment volume of diamonds in Antwerp, Belgium—considered a global diamond distribution hub along with Dubai, UAE—has decreased by 85% since President Trump announced the tariffs on the 2nd. Karen Rentmeesters, CEO of the Antwerp Diamond Centre, the representative organization of Antwerp’s diamond industry, stated:
While several minerals like gold and copper were excluded from the 10% global tariffs imposed by the Trump administration, diamonds were not spared. Reciprocal tariffs are also expected to be imposed based on the country of origin. Diamonds are typically mined in countries like Botswana, pass through distribution hubs including Dubai, and are processed in India. In the US, only certification procedures are generally conducted. The Gemological Institute of America (GIA), the world’s largest grading institution, is headquartered in California.
90% of the world’s diamonds undergo polishing processes in India. The issue is that the country where the polishing process takes place is considered the country of origin for the finished diamond product. The reciprocal tariff President Trump has signaled for India is up to 26%.
The United States, the world’s largest diamond consumer, relies entirely on imports as it has no diamond mines. The FT reported, “The common procedure of sending diamonds to the US for certification and then re-exporting them is being severely threatened by these tariffs.” Pritesh Patel, COO of GIA, said:
Natural diamonds are facing declining demand as they compete with lab-grown diamonds. According to the International Diamond Exchange (IDEX), the international natural diamond price index (2021=100) has fallen from 107.2 in April last year to 95.38 as of the 16th of this month.
With the additional imposition of tariffs by the Trump administration, the diamond industry is reeling. Richard Chetwode, Chairman of mining company Tracore Resources, criticized:
Experts believe the global trade war will impact overall diamond demand. Serious disruption to the diamond supply chain is also expected. Independent diamond analyst Paul Zimnisky explained: