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Diamond Trade Grinds to a Halt Amid Tariff Impact
Diamond shipments have significantly slowed, with industry insiders reporting a near “standstill” as demand for the precious stones sharply declines. Following the implementation of global tariffs by the United States, Antwerp, a major global hub for diamond trade, has experienced a dramatic decrease in shipments, falling to one-seventh of typical volumes. This downturn highlights the severe impact of tariffs on the diamond industry and global gem movement.
Tariffs Batter Diamond Imports
Despite exclusions for minerals such as gold and copper, diamond imports have been subjected to a 10% tariff, along with a potential “retaliatory” levy on specific nations. The United States, a pivotal market representing half of global diamond demand, is heavily reliant on foreign imports due to its lack of domestic diamond mines. Antwerp, Belgium, is particularly affected by these levies. Karen Rentmeesters, chief executive of the Antwerp Diamond Centre, stated that the city’s diamond shipments have practically “ground to a halt” since the tariff announcement.
Industry Disruption and Parallels to Pandemic
“It’s disrupting the sector,” Rentmeesters conveyed to the Financial Times, emphasizing the illogical nature of including Belgian diamonds in the US tariffs. She drew parallels between current sales figures and the sharp shipment declines observed during the Covid-19 pandemic. “Everything literally ground to a halt,” she reiterated, highlighting the severity of the present trade slowdown.
Existing Industry Strain Exacerbated by Tariffs
Prior to the introduction of tariffs, the diamond industry was already facing challenges from the coronavirus pandemic and growing competition from lab-grown diamonds. Richard Chetwode, Chair of mining firm Trustco Resources, informed the outlet that trade is currently in a precarious state. “If you are suddenly imposing tariffs on it, you are essentially crippling it,” he explained, underscoring the detrimental effect of the new levies on an already weakened market.
US Role in Diamond Certification Process
The United States occupies a crucial position in the diamond supply chain, specifically at the final stage of the certification process. The Gemological Institute of America (GIA), the world’s largest certification agency, is headquartered in California.
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Typically, diamonds are initially mined in one country, traded in another, and polished in a third before ultimately reaching the United States.
Seeking Tariff Exemptions for Certification
Pritesh Patel, chief operating officer at the GIA, indicated that the organization is exploring the possibility of securing tariff exemptions for diamonds imported into the US solely for certification purposes. This measure could potentially mitigate some of the tariff impact on the industry.
GIA Expands Global Services
Mr. Patel further mentioned that GIA is expanding its service offerings in other countries to accommodate some of the repercussions stemming from the tariffs. This expansion aims to geographically diversify services and potentially lessen the reliance on US-based operations amidst the ongoing trade disputes.