This interview was first published in the print edition of the Diamond World magazine (September-October).
How are major US jewellery retailers responding to the 50% tariff on Indian diamonds, and what immediate challenges are they facing in terms of sourcing and pricing?
The US trade was proactive in that it front-ran the risk of higher tariffs when the duty was reduced to 10% in April through July. Of course, this turned out to be the correct course of action, given that the rate was hiked to 25%, and then again to 50% in August. Given that the trade is sitting on a few months of excess stock, mostly everyone is currently in a wait-and-see mode. There is an expectation that some sort of a trade deal will be reached between the US and India, which would significantly reduce the tariff, or exempt it altogether. But as more time passes, the situation becomes trickier as inventories are run down. The rough side of the diamond market is most sensitive to this at the moment.
Are US retailers actively exploring alternate supply routes or countries to mitigate dependence on Indian polished diamonds, or are they absorbing the tariff impact for now?
The US trade made adjustments when President Trump initiated large tariffs on China during his first term in 2018. That actually pushed more jewellery manufacturing to India. However, this time, given the sweeping nature of the tariffs, the situation is more difficult. There are some methods being deployed to reduce the impact, such as importing jewellery components from America, and assembling in India, before exporting back to the US. However, the net costs and time constraints are still quite difficult. As far as the dynamics inside the US are concerned, most independent retailers are at the mercy of their wholesalers.
Have you observed any visible change in US consumer buying behaviour since the tariffs were imposed — for example, trading down to smaller stones, alternative gemstones, or lab-grown diamonds?
The impact has been almost entirely on the B2B side of the business. Consumers do not typically pay close attention to these more nuanced industry developments. If anything, diamond, and jewellery consumption in the US has outperformed in 2025, boosted by the wealth effect of higher asset prices like stocks, crypto and real estate. However, at a certain point, consumers will likely be sensitive to price increases related to the tariffs; it is just that we are not there yet. At the moment, record gold prices are having a much bigger impact on the jewellery consumer than the tariff on diamonds.
Do these tariffs give other diamond centres like Belgium, UAE, or Botswana an edge over India in supplying to the US market, or is India’s scale and expertise too difficult to replace in the near term?
It is very difficult to compete with India in diamond manufacturing due to the labour cost, expertise and business hub infrastructure. If anything, the beneficiation centres, like Botswana, Angola and Namibia, are the most likely to benefit if they can successfully negotiate down the tariff. But is it almost impossible to replace India in the short- or even the medium-term.
Given that the US remains the world’s largest diamond jewellery market, how are American consumers reacting to potential price increases — are retailers passing costs on, or cutting margins to stay competitive?
Stereotypically, consumers in the US tend to like big and cheap, and this goes for diamonds as well. This is likely the primary reason why lab-grown diamonds have gained such popularity here. That said, I think discounting the diamond market and devaluing the product with machine manufactured stones has been at a huge detriment to the longer-term health of the larger fine diamond jewellery industry.
I do think natural diamonds will have a renaissance in the US, and higher prices may actually help instill the value perception of the product, even if that sounds counterintuitive. In general, if you are in the business of selling fine jewellery, I do not think you should be afraid of charging premium prices for premium products like natural diamonds.
To what extent do you think the tariffs could accelerate the shift towards lab-grown diamonds in the US, considering they are often marketed as a more affordable alternative?
The prices of LGDs in the US are already very low. If anything, higher natural diamond prices due to the tariffs could further differentiate the two products, to the benefit of natural diamonds. I think the next phase of growth of LGDs in the US will involve taking market share from similarly-priced simulants, such as moissanites, created white sapphires and even CZs.
From your perspective, what could be the long-term impact of these tariffs on US-India diamond trade relations, and what strategies should Indian diamantaires adopt to remain resilient in this scenario?
The tariffs could result in a major reshuffling of the global supply chain. This has already been happening in recent years, owing to deglobalization and protectionist policies. But the tariffs have already had some major impact. For example, Apple, the second largest company in the world, moved a great deal of iPhone manufacturing from China to India. I expect we will be seeing more of this sort of a thing. I would like to add that I am very much a free market capitalist, so I do not like this, but it is the reality.
About Paul Ziminsky
Paul Zimnisky, CFA, is a New York area-based independent diamond industry analyst and consultant. He publishes a leading monthly industry report called State of the Diamond Market, maintains the widely tracked Zimnisky Global Rough Diamond Price Index, and produces a popular industry podcast -- the Paul Zimnisky Diamond Analytics Podcast. His website is www.paulzimnisky.com, and he can be followed on X @paulzimnisky, and on YouTube @paulzimnisky.