Editor’s Note
Israel’s diamond industry, a cornerstone of its export economy, faces an unprecedented crisis that could jeopardize thousands of jobs. Industry leaders are urgently calling for government intervention to safeguard this historic sector.
Israel’s diamond industry, one of the country’s historic export pillars, is warning of an unprecedented crisis that leaders say could threaten the livelihoods of its 6,000 workers unless the government intervenes quickly.
Nissim Zuaretz, president of the Israel Diamond Exchange, said the industry faces an “existential threat” after the United States lifted tariffs on diamonds from Belgium and the European Union but not from Israel.
The U.S. currently imposes a 15% tariff on Israeli diamonds, a policy dating back to tariffs introduced during the Trump administration. Diamonds imported from the European Union, by contrast, enter the U.S. duty-free.
The exchange and industry representatives are calling on the Prime Minister’s Office, the Finance Ministry, and the Economy Ministry to negotiate with Washington for an exemption on diamond imports, similar to that granted to Europe. They also want foreign companies operating within the Israeli Diamond Exchange to be exempt from corporate tax as part of a proposed free trade zone.
According to exchange data, imports of polished diamonds fell 32.9% over the past year, while exports dropped 35.7%.
Zuaretz said some diamond traders are already struggling to survive.
The diamond industry exports about $3.5 billion annually to the United States, accounting for roughly 8% of Israel’s total exports.
Zuaretz described the current situation as “a real alarm before an entire export industry collapses.” He said the industry has been battered by a series of blows — the COVID-19 pandemic, the Russia-Ukraine war, the Israel-Hamas war that began in 2023, and now the U.S. decision to remove tariffs for Europe alone.
Zuaretz welcomed recent remarks by Finance Minister Bezalel Smotrich in support of establishing a diamond free trade zone, calling them “the first light at the end of the tunnel.” He also praised Israel Tax Authority director Shay Aharonovich for backing the initiative but said action must follow.
He added that a free trade zone could attract foreign investors, create jobs, and restore Israel’s position in the global diamond market.
Despite the crisis, Zuaretz noted that many of the world’s most famous diamonds — including those worn by top athletes and celebrities — are still polished in Israel.
