Global Diamond Market Faces Turbulence Amid Tariffs and De Beers Ownership Shakeup

Gems News: Shifting Prices Reflect Uncertainty

The diamond industry entered September under a cloud of market anxiety as prices continued to fluctuate and investor confidence weakened. With the sale of De Beers still unresolved and the imposition of new US tariffs shaking supply chains, both manufacturers and retailers are navigating through an increasingly unpredictable landscape. Industry data showed sharp declines in polished prices for smaller diamonds under one carat, while larger stones and long fancy shapes remained relatively stable or saw modest gains.

Across trading hubs from Mumbai to Antwerp, dealers reported cautious buying activity. According to this Gems News report, demand was strongest for 2-carat and above fancy shapes, but traditional round cuts—especially those below one carat—suffered steep price drops. Many traders attributed this split to the lingering effects of global inflation, tightening consumer spending in the US and Europe, and uncertainty over trade policies affecting the flow of polished goods into the world’s biggest jewelry markets.

Tariff Troubles and Trade Shifts

The recent imposition of tariffs by the United States on imported polished diamonds caused a ripple effect throughout the supply chain. The duties, as high as 50% on Indian goods, severely disrupted pricing stability and forced many suppliers to scale back exports. While the European Union secured a zero-tariff agreement for diamonds polished within its borders, other major producers like Botswana are still in negotiations for similar exemptions. The White House, however, hinted at possible relief by adding diamonds to a list of items eligible for tariff exemptions under new trade agreements.

These developments arrived at a sensitive time for the industry, as American jewelers prepared for the upcoming holiday season. Independent jewelry retailers across the US reported steady consumer traffic, yet they struggled with limited supply and higher wholesale prices caused by the import restrictions. Meanwhile, trading floors in Asia, particularly at the Jewellery & Gem World show in Hong Kong, mirrored this uneven demand pattern—with robust interest in larger stones but subdued appetite for small to mid-sized goods.

Production Cuts and De Beers Sale

In India, the world’s largest diamond cutting and polishing hub, manufacturers responded to weakening global demand by reducing output. Data from August revealed a sharp fall in rough diamond imports to just under $770 million, down from over $1.1 billion in July, though still slightly above the same month in 2024. Factories in Surat and Mumbai operated below capacity, hoping that seasonal buying in the final quarter of the year might stabilize prices.

Adding to the uncertainty is the ongoing sale of De Beers, a transaction closely watched by the entire gemstone sector. The Botswana government has expressed interest in increasing its stake, while Angola has reportedly placed a bid for a minority share. To maintain market confidence, De Beers extended its sightholder contracts through June 2026, signaling its intent to ensure stability during the ownership transition.

Market Outlook Remains Guarded

While some industry leaders remain optimistic that the market will recover as trade routes and pricing adjust, most analysts agree that the volatility will persist into early 2026. The strength of demand in the US holiday season, the outcome of De Beers’ sale, and any easing of tariffs will likely determine the pace of recovery. In the meantime, cautious optimism defines the mood—buyers and sellers alike are watching every price movement and policy announcement that could alter the delicate balance of global diamond trade.

The coming months may decide whether the market steadies itself or faces another round of turbulence. Either way, industry insiders acknowledge that the diamond business is entering a period where adaptability and strategic foresight will determine who thrives and who fades from the glittering world of gems.

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