Diamond rings and bracelets on show in a present window in Antwerp, Belgium. (Photograph by Yuriko Nakao/Getty Photographs)
Yuriko Nakao | Getty Photographs Information | Getty Photographs
They may be fabricated from the toughest materials on earth, however diamonds, with their complicated provide chains and costly price ticket, are notably fragile to U.S. President Donald Trump’s aggressive tariff agenda.
The valuable mineral is dealing with a baseline 10% import obligation to the U.S. — a market accounting for over half of the worldwide demand for polished diamonds. The sector can also be bracing for extra duties ought to Trump’s 90-day pause come to an finish with no new agreements.
“It’s extremely clear that the diamond business, on a world degree, has been dealing with an ideal storm of challenges,” Karen Rentmeesters, chief government of the Antwerp World Diamond Centre advised CNBC, including that tariffs are simply “the most recent blow.”
The small valuable stones usually cross a number of borders earlier than ending in a retailer. From mines in Botswana or South Africa, to buying and selling hubs within the Center East or Europe, after which on to slicing and sharpening hubs, earlier than heading again to a jewellery producer — there may be usually an extended journey earlier than the merchandise arrives in a retailer. This complicated provide chain means the diamond business is extremely vulnerable to any commerce disruptions.
Uncooked supplies comparable to gold and copper have been excluded from U.S. tariffs and the business is pushing for diamonds to even be excluded.
Rentmeesters who heads the 580-year-old company which represents over 1,400 firms inside Antwerp’s diamond district, stated: “You could possibly argue that free diamonds are a uncooked materials. You do not stroll round with a sophisticated diamond in your hand. You are sporting it in a chunk of knickknack. It is in a hoop or a pair of earrings.”
The tariff uncertainty comes at a time when the luxurious business at massive is already contending with a slowdown in demand after a post-pandemic growth and an financial droop in China.
Lab-grown diamonds mark an ongoing shift
Nevertheless, the largest disruption to the business has been the creation of lab-grown diamonds (LGD). Chemically an identical, the stones are unimaginable to differentiate with the bare eye. They’re promoting at an 80% low cost to the pure model and clients are making the most of the cheaper costs.
Over half of {couples} surveyed within the U.S. final yr, stated their engagement ring featured a lab-grown diamond, in response to the 2025 Actual Weddings examine by The Knot which included insights from practically 17,000 {couples}.
A watershed second was in 2021 when Pandora, the world’s largest jewellery model by quantity, grew to become the primary to cease promoting mined diamonds.
“Within the US, some 18 months in the past, the amount of lab-grown diamonds in free stones surpassed that of mined. So if there’s any doubt in individuals’s minds that there is a shift occurring, it was very seen from there, and since then, it retains on rising,” Pandora CEO Alexander Lacik advised CNBC.
“With one of these worth proposition that lab grown diamonds can supply, we will really supply diamonds to extra individuals. So it is not essentially that we see that the overall quantity of diamonds goes to go down. We’ll in all probability invite extra individuals into the class.”
With the poor macroeconomic situations and growing competitors from LGD, the value of mined diamonds has fallen practically 60% since a peak in March 2022.
Tariffs threaten stabilization level
Nevertheless, some analysts say the business is near reaching a degree of stabilization between LGD and mined diamonds. “The query you must ask is, how a lot decrease can costs go earlier than shoppers see clear differentiation between the 2 merchandise,” stated Paul Zimnisky, an unbiased diamond analyst.
He added: “And I feel we’re lastly beginning to get to that time the place you possibly can purchase, you already know, a 3, 4 or 5 carat, that are ridiculous sizes for an engagement ring — you possibly can purchase the lab grown model for, you already know, just some $1,000 whereas the pure model goes to be tens of tons of of hundreds of {dollars}. So, I feel that value differential is definitely creating distinction.”
Within the face of those challenges, some key gamers are rethinking their methods.
De Beers, a significant participant within the diamond business, stated there have been indicators of an uptake in U.S. demand earlier than Christmas and earlier than the tariff uncertainty hit. As an alternative of investing within the burgeoning market of LGD, DeBeers is doubling down on pure diamonds.
De Beers lately introduced it is going to shut its LGD jewellery model Lightbox in a bid to strengthen “its dedication to pure diamonds within the jewellery sector.”
“The persistently declining worth of lab-grown diamonds in jewellery underscores the rising differentiation between these factory-made merchandise and pure diamonds,” De Beers CEO Al Prepare dinner stated in an organization assertion.
This {photograph} taken on February 6, 2024 exhibits workers working at Greenlab Diamonds, a agency manufacturing lab-grown gems on the outskirts of Surat.
Sam Panthaky | Afp | Getty Photographs
The agency stated the closure is aligned with the technique it introduced in Might final yr, “to give attention to high-return actions and streamline the enterprise.”
The closure additionally comes at a time when Anglo American, De Beers’ father or mother firm, is divesting the corporate and is within the means of on the lookout for potential consumers.
Within the present luxurious slowdown jewellery has been a notable vibrant spot, particularly the high-jewelry phase, seen as much less cyclical catering to probably the most prosperous clientele.
Earlier this month, Richemont beat expectations with revenues boosted by double-digit progress on the group’s Jewelry Maisons division, which incorporates Cartier, Van Cleef & Arpels and Buccellati.
In response to analysts, the important thing for the mined business going ahead is within the messaging: “It’s a must to keep in mind a diamond, it is a very emotional buy. It isn’t a sensible buy. And folks just like the story behind the creation,” Zimnisky stated.
“I simply suppose it is as much as the business to offer shoppers with the boldness they want if they will spend considerably extra for a pure diamond, they wish to ensure it is positively a pure diamond. I feel that needs to be the business’s precedence at this level.”