Belgian Diamonds Lose US Tariff Exemption as Trump Reimposes 10% Global Duty

 

The global diamond trade is facing renewed uncertainty after Belgian diamonds lost their US tariff exemption under a newly imposed 10% global import duty announced by US President Donald Trump.

The move follows a ruling by the Supreme Court of the United States, which struck down the legal basis for earlier tariffs introduced under the Emergency Economic Powers Act. In response, the Trump administration enacted a blanket 10% global tariff under Section 122 of the Trade Act of 1974 — a provision that requires duties to be applied consistently to all countries.

Antwerp Diamond Industry Hit Hard

The removal of exemptions directly impacts Antwerp, one of the world’s most important diamond cutting and polishing centres. Antwerp World Diamond Centre confirmed that companies should assume the 10% global duty now applies to polished diamonds entering the US until further clarification is provided.

Previously, diamonds polished in Europe had been exempt from US tariffs under a negotiated EU-US arrangement. That exemption gave Belgium a competitive edge over rival trading hubs such as India and Dubai. Under the new regime, however, those carve-outs no longer appear to apply.

The economic consequences could be significant. While the affected EU trade represents approximately US$4.6 billion annually — less than 1% of the EU’s total exports to the US — the impact is highly concentrated in specific industries, particularly diamonds.

Matthias Diependaele, Minister-President of Flanders, described the development as a “shockwave in Antwerp,” warning that trade volumes are under pressure, volatility is rising, and predictability in US demand has virtually disappeared.

Legal Constraints Under Section 122

Legal experts note that Section 122 of the Trade Act of 1974 mandates consistent application of tariffs across all countries. This effectively prevents the US administration from granting country-specific exemptions, including those previously negotiated with the European Union.

According to independent trade monitoring body Global Trade Alert, while many globally applied product exemptions — such as those for electronics — have been carried over into the new tariff regime, hundreds of country-specific exemptions agreed with the EU last year, including those covering diamonds and cork, are absent from the latest published exemption list.

Economist Johannes Fritz, CEO of Global Trade Alert, stated that the use of Section 122 effectively “handcuffs” the administration, making country-specific carve-outs legally problematic.

What This Means for the Global Diamond Market

For the international diamond pipeline, the reimposition of tariffs adds another layer of complexity to an already fragile market. Supply chains that rely on cross-border polishing, trading and distribution may face increased costs and pricing pressures in the US — the world’s largest consumer market for natural diamonds.

From a certification and grading perspective, heightened market volatility underscores the importance of independent, transparent assessment standards. As Australia’s recognised authority and official CIBJO laboratory, DCLA continues to monitor global trade developments closely to ensure clarity, confidence and integrity within the diamond sector.

Further clarification from US and EU officials is expected in the coming weeks as discussions continue regarding the duration and scope of the new tariff regime.

Source: DCLA

India’s Polished Exports Rise in Rush to Beat US Tariffs

India’s gross monthly exports of polished diamonds jumped 17.8 per cent in July, as manufacturers rushed to get their goods into the US before the 50 per cent tariffs took effect.

It was the first year-on-year increase since last October, when the markets showed some small signs of a possible recovery. Since then exports have declined every month.

Foreign sales were $1.07bn, according to the latest data from the Gems and Jewellery Export Promotion Council (GJEPC), following on from India suffered a 23 per cent dip in June, with total exports of $779m.

US tariffs on Indian exports were first announced in April, but didn’t take effect until August. The initial 25 per cent tariff was imposed on 7 August, prompting a rush to export, and an additional 25 per cent tariff – what President Donald Trump describes as a punishment for India buying Russian oil – comes in on 27 August. This could lead to another monthly increase in August, as manufacturers try to beat the next tariff deadline.

Meanwhile, imports of rough diamonds for April to July grew slightly, up 1.5 per cent to $4.37bn.

Overall gross exports of gems and jewelry also rose on tariff worries, up 17 per cent to $2.18bn.

Kirit Bhansali, GJEPC chairman, said: “The July export figures, a successful IIJS Premiere with strong order bookings, and the revival of the Hong Kong market are encouraging signs for our industry, especially amid global challenges such as the impact of US tariffs.”

Source: DCLA

Will US Tariffs Threaten the World’s Largest Diamond Cutting Hub?

In Surat, India’s famed “Diamond City”, where 14 out of every 15 natural diamonds are cut and polished, a deepening crisis is unfolding.

For Kalpesh Patel, a 35-year-old owner of a small diamond cutting and polishing unit, this year’s Diwali could mark more than just a festival of lights — it may signal the lights going out on his eight-year-old business. Patel employs 40 workers transforming rough stones into polished gems destined primarily for the United States. But with the recent announcement by US President Donald Trump of a 50% tariff on imports from India — taking the total duty on cut and polished diamonds to 52.1% — the industry’s already fragile state may tip into collapse.

The US is India’s largest export market for diamonds, accounting for over one-third of total shipments. In the 2024–25 financial year, India exported $4.8 billion worth of cut and polished diamonds to the US, out of a total $13.2 billion worldwide. For many small and medium-sized manufacturers in Surat, Ahmedabad, and Rajkot — employing more than two million people — this trade lifeline is now under severe threat.

An Industry Already Under Pressure

The tariffs arrive on top of multiple recent challenges. The COVID-19 pandemic slowed global luxury demand, the Russia-Ukraine conflict restricted access to rough diamonds, and the G7 ban on Russian stones further strained supply chains. Salaries for many diamond workers in Gujarat have already been halved in recent years, with some forced into poverty-level incomes. Tragically, industry unions report dozens of suicides linked to the ongoing downturn.

Lab-grown diamonds have added to the pressure, offering consumers a lower-priced alternative — often just 10% of the cost of natural diamonds — and proving difficult to distinguish without professional laboratory testing, such as that provided by DCLA. This shift in consumer preference is eating into the market for natural stones, further squeezing margins for cutters and polishers.

Declining Trade Figures

According to the Gem and Jewellery Export Promotion Council (GJEPC), India imported $10.8 billion worth of rough diamonds in 2024–25, a 24% drop from the previous year. Exports of cut and polished natural diamonds fell nearly 17% year-on-year.

Industry leaders warn that if the new US tariffs remain in place, as many as 200,000 workers could lose their jobs in Gujarat alone.

Ripple Effects Beyond India

The impact will not be confined to India. US jewellers — around 70,000 businesses — will also feel the pressure as higher prices could dampen consumer demand. This could disrupt supply chains, delay deliveries, and push customers towards alternative products.

Finding a Way Forward

Some in the industry see an opportunity to strengthen domestic demand and diversify exports towards Latin America, the Middle East, and other emerging markets. India’s domestic gems and jewellery market is projected to grow from $85 billion to $130 billion within two years, offering a potential buffer.

For now, though, the threat is real and urgent. Without relief on tariffs, support for natural diamond certification, and a coordinated strategy to protect jobs, the world’s biggest cutting and polishing centre risks losing its global dominance — and with it, a key part of the natural diamond supply chain.

As Patel puts it, “Without help, the business will lose its shine forever.”

Source: DCLA

Tariffs Turmoil: India Edging Towards Last-Minute US Deal

India today appeared to be edging towards a last-minute “mini trade deal” that could see the US back down on its proposed 27 per cent reciprocal tariffs.

President Donald Trump said earlier today on Tuesday said that the US was was “close to making a deal with India,” with just hours left before the deadline at 12.01am EST on Wednesday 9 July.

Such a deal would come as a huge relief for the country’s diamond industry, which has been largely paralyzed by three months of uncertainty since President Donald Trump made his “Liberation Day” speech on 2 April.

A deal between the two countries would be limited in scope, according to reports, but would likely cover diamonds.

It could include a partial rollback of reciprocal tariffs imposed by the US earlier this year, but the 10 per cent baseline tariff on most goods is expected to remain.

If no deal is reached, the tariffs will automatically take effect from 1 August.

So far only the UK and Vietnam have managed to reach a full deal – and China a partial deal – ahead of the 9 July deadline.

Source: DCLA