Editor’s Note
This article examines the severe disruption to the $82 billion global diamond trade, particularly in hubs like Antwerp, following the imposition of tariffs under the Trump administration. It highlights how geopolitical trade policies can ripple through specialized global markets.
The diamond export from Antwerp, a global diamond trading hub on par with Dubai, has come to a standstill due to Trump’s tariffs. (European Pressphoto Agency)
The tariff war and global trade conflict ignited by former US President Donald Trump have severely impacted various markets, with the global diamond industry, valued at $82 billion, being hit particularly hard. Shipments from the diamond trading hub of Antwerp, Belgium, have plummeted to just one-seventh of their normal levels. Local diamond traders describe the situation in Antwerp as a complete standstill.
According to a report by the UK’s Financial Times, the United States is the world’s largest consumer market for diamonds, accounting for approximately half of global demand. However, as the US has no domestic diamond mines, it relies entirely on imports. Trump’s comprehensive tariff measures include a 10% levy on diamond imports and the imposition of variable reciprocal tariffs based on the country of origin, though most other metal minerals, including gold and copper, were excluded.
Although the implementation of reciprocal tariffs has been suspended for 90 days, the basic 10% tariff came into effect as scheduled and remains in force. The resulting market uncertainty is impacting traders and India’s vast diamond processing industry.
Rentmeesters estimates that current daily shipment volumes are only about one-seventh of normal levels.
The diamond industry has been in a slump for several years, primarily due to the COVID-19 pandemic and competition from lab-grown diamonds, leading to shrinking consumer demand.
Over 90% of the world’s diamonds are cut and polished in India. Since the “country of origin” for finished diamonds is determined by where they are processed, India’s multi-billion dollar diamond export industry would be the first to suffer if the US imposes a 27% retaliatory tariff on Indian goods, unless an agreement to avoid tariffs can be reached between the two sides.
The only part of the diamond supply chain located in the US is the grading process. The Gemological Institute of America (GIA), the world’s largest grading institution, is based in California. However, the previously common practice of “shipping to the US for grading and then exporting” is now under threat. Pritesh Patel, Chief Operating Officer of GIA, stated that in response to the tariff impact, they are enhancing overseas services at their eight international locations and are also exploring whether diamonds imported into the US solely for grading could be exempted from tariffs through methods like “temporary import bonds” or “free trade zones.”