Tariff Uncertainty Amplifies Pressure on Diamond ABS Sector

The US’s significant tariff initiatives have heightened uncertainty across global trade flows and capital markets. Although implementation has been paused for 90 days, a baseline 10% tariff is now in effect, pending further negotiations. The diamond trading sector is particularly sensitive to these developments, as the US remains the world’s largest single end-market for polished diamonds, representing between 40% and 55% of global demand by value, according to industry sources.

Initial proposals had included tariffs of up to 26%¹ on goods substantially processed in India—a major diamond polishing hub responsible for over 90% of the world’s diamond processing by volume. The final policy trajectory remains uncertain, but a sustained increase in import costs would likely translate into higher US retail prices for diamond jewellery, which could dampen consumer demand. For the midstream market—comprising cutters, polishers, and traders—this creates…