FT: Entire $80bn Industry At Standstill Due To Trump Tariffs
- 15.04.2025, 13:43
Uncertain outlook has had a chilling effect on gem traders.
Diamond traders say an $82bn industry has been “at a standstill” due to Donald Trump’s tariffs and the global trade war. Shipments through the gem trading hub of Antwerp have fallen to about a seventh of normal levels.
This was reported by RBC-Ukraine, citing the Financial Times.
Trump’s massive tariffs include a 10% levy on diamond imports, as well as “retaliatory” duties on countries of origin, although many other minerals such as gold and copper are excluded from the measures.
The US is the world’s largest consumer of diamonds, accounting for about half of global demand, but it has to import them all because it has no domestic diamond mines.
Although Donald Trump has suspended the so-called retaliatory tariffs for 90 days, the base 10% tariff is already in place and remains in place. The uncertain outlook has had a chilling effect on gemstone dealers, as well as India’s huge cutting and polishing industry.
Sales at a standstill
Rough diamond shipments from Antwerp, one of the world’s busiest diamond trading centers along with Dubai, have “stopped” since Trump announced new global tariffs this month, according to Karen Rentmeesters, CEO of the Antwerp Diamond Center.
She said it “doesn’t make sense” to include diamonds in the U.S. tariffs, and compared the upheaval in the highly globalized industry to that caused by the coronavirus pandemic.
Rentmeesters estimated that daily shipments were just a seventh of normal levels. “It’s devastating the industry,” she said. “Everything has literally stopped.”
The diamond industry has already endured a difficult few years, with the pandemic and competition from lab-grown diamonds denting consumer demand.
The head of mining company Trustco Resources said tariffs on diamonds will not drive production to the U.S.
A typical diamond travels around the world many times before it reaches a buyer, between producing countries like Botswana, trading hubs including Dubai, and cutting centers in India.
The only part of the supply chain that is in the U.S. is the certification process. The world’s largest certification agency, the Gemological Institute of America, is based in California and employs 3,200 people.
The normal process of transporting diamonds to and from the U.S. for certification is now under threat.
Threat to the Industry
A global trade war is likely to hurt overall diamond demand, which has barely begun to recover after several difficult years, and create major disruptions to the supply chain, analysts say.
India, whose vast cutting industry processes more than 90% of the world’s diamonds, could be hit particularly hard.
Because cut diamonds are considered “originating” in the country where they were cut, India’s multibillion-dollar diamond export industry would be hit by a 27% tariff proposed by the U.S. on Indian goods unless the two countries reach an agreement to avoid the tariffs.
For global diamond demand, “uncertainty is a problem,” said Paul Zimnisky, an independent diamond analyst. “When people are unsure, they are hesitant to buy, they are hesitant to invest. I think that will have some impact on consumer goods, like luxury goods like diamonds.”
De Beers owner Anglo American has written down $4.5 billion in the diamond giant’s value over the past two years due to poor market conditions. Anglo is preparing to spin off De Beers in an initial public offering later this year.
New York-listed Signet Jewelers, the world’s largest diamond jewellery retailer, is also battling tariffs. On April 4, the company told its suppliers that it would “not pay at all” for any new tariffs on existing purchase orders, meaning it would require its overseas suppliers to pay the duties.
In a letter seen by the FT, Signet also urged its suppliers to ship existing orders to the US as soon as possible, “focusing on April and May.”
It should be noted that Trump on April 2 announced a 10% tariff on all countries and higher tariffs for certain countries. On April 9, the U.S. President announced a 90-day pause on tariffs for major trading partners.