Sharp Decline in Belgian Trade

The shock of the new rules has left its mark on one of the busiest trading hubs for these precious stones — Antwerp, Belgium. According to Karen Rentmeesters, director of the Antwerp World Diamond Centre (AWDC), trading has come to a halt, dropping to one-seventh of its usual volume. AWDC reports that imports and exports have been declining since the Covid pandemic, with 2022 offering only partial relief. Key factors influencing the situation include geopolitical tensions, cautious Chinese and American customers, and a rising demand for lab-grown diamonds. In the first quarter of 2025, the export of polished diamonds reached $1.58 billion — a year-over-year decline of nearly 28 percent. Import levels followed a similar trend. For rough diamonds, the drop is even more severe — up to 47 percent, and for imports, 40 percent. Adding to the complexity is the fact that the diamond industry is a vital part of the Belgian economy. The European Union has therefore responded to the pleas of the diamond centre and decided not to impose reciprocal tariffs on diamond imports from the U.S.

Will exemptions solve it?

Although Donald Trump is trying to bring production in all sectors back to the USA through tariffs, in this case, it might not have the desired effect. The United States does not have any mines, so it depends on the foreign supply of diamonds. The only process carried out in the US is certification, which takes place at the Gemological Institute of America (GIA). The institute, which is also affected by the tariffs, is responding by diversifying its operations to Hong Kong and Dubai and is seeking a customs exemption for gemstones that enter the United States solely for certification purposes. In this case, the idea of a more suitable trade regulation setting by sector, such as that applied by the EU, is coming to the forefront — or even the complete removal of diamonds from the list, as is the case with gold.

An Indian disaster?

Another key link in the supply chain is also at risk — diamond polishing. The global leader in this field is India, specifically the city of Surat in the Indian state of Gujarat, where 80 percent of rough diamonds are polished. A basic 10 percent tariff applies to all of India, which will rise to 27 percent after 90 days unless both sides agree otherwise — something that is devastating for smaller businesses. The economy will also suffer the consequences, as diamonds and jewellery represent the third-largest export commodity. Some Indian diamond traders have even described the situation as worse than the global financial crisis of 2008. Processors tried to sell as many diamonds as possible before the tariffs came into effect on April 9, 2025, but after that date, further shipments have been either suspended or entirely cancelled. Traders will have to find alternative markets willing to absorb the same volume of diamonds that was exported to the USA, which will be a difficult task considering the global drop in demand. To illustrate — in the fiscal year 2023/2024, over 30 percent of India’s annual exports, worth USD 32 billion, went to the United States.

Slumps to multi-year lows

The persistent decline in demand in the two largest economies in the world, the United States and China, led to a year-on-year drop of nearly 17 percent in India’s exports of processed diamonds during the 2024/2025 period. This negatively affected the entire export segment of precious metals and jewellery. Its value fell by 12 percent, to the lows of 2020/2021, specifically to 28.5 billion USD. To partially protect themselves, processors ordered 24 percent fewer rough diamonds than in the previous year. According to Reuters, some exporters do not even expect an improvement this year.

The potential of lab-grown diamonds

The lack of interest in natural diamonds, in addition to the economic impact on the countries in the supply chain, has led to an even greater rise in synthetic diamonds. Due to their price and their great similarity to real stones, they are increasingly preferred by consumers. According to the portal Rough-Polished.com, engagement rings with lab-grown diamonds currently account for as much as 52 percent of sales in the USA. In 2019, it was “only” around 12 percent. Continued growth is expected, with production projected to rise to 97 billion USD by 2034, from 26 billion last year. Due to their affordability, they would remain a better choice for many than natural diamonds, even with the imposition of tariffs.