Q. Antwerp now stands as the only major diamond hub with tariff-free access to the crucial US market. How does this unique position immediately change the competitive dynamic with major polishing centers like India, which faces a significant 50% tariff?
It is clear that this is a major boost to diamond manufacturing in Antwerp. Although the labor costs in Antwerp are significantly higher than in other major polishing centers like India, the absence of tariffs on diamonds polished in Europe and exported to the United States, is a big advantage, especially for larger diamonds, where the labor costs for manufacturing have less impact on the total cost.
Q. What was the immediate reaction within the Antwerp diamond community when the 0% tariff exemption was confirmed?
In general, the immediate reaction was very positive, as this was basically the first good news for quite some time.
Q. Antwerp currently exports around $2.1 billion worth of polished diamonds to the US annually. What increase in export volume or value do you anticipate as a direct result of this tariff advantage?
The current competitive advantage will certainly help Belgian manufacturers to increase production. As far as the increase in export volume or value is concerned, it is hard to predict for different reasons. First of all, it will depend on the demand for larger diamonds in the United States, and especially on orders to rebuild stock levels after the holiday season. It will also depend on the ability to increase manufacturing capacity in Belgium, both in terms of skilled diamond cutters and equipment. This is easier said than done. Besides, some companies may be reluctant to invest due to the uncertainty of how long the competitive advantage will remain in place. This being said, the local diamond manufacturing sector is relatively small, especially as compared to India.
Q. The exemption applies specifically to diamonds of European origin polished in the EU. Does this create a viable opportunity to revitalize or expand Antwerp’s local cutting and polishing sector, which has declined over the past 20 years due to cost competition?
Yes, the exemption creates a viable opportunity to revitalize manufacturing in Antwerp. The measure by the Flemish government allowing foreign diamond polishers and sorters to work in Flanders via a simplified procedure will certainly help.
Q. Are there specific types of stones or market segments that Antwerp-based diamantaires are now targeting?
The Antwerp diamond manufacturing sector will focus on manufacturing larger stones for the US market, while still serving its other markets.
Q. The AWDC noted this exemption could set a precedent for other nations. Do you believe that other centers will also achieve the tariff exemption status?
I hope that other center will achieve tariff exempt status, both on rough diamonds and on polished diamonds. Our trade requires a stable environment to flourish. Frictionless cross-border exchanges are optimal to achieve this.
Q. How would a universal zero-tariff framework impact the global trade in natural diamonds?
I am convinced that this would bring back confidence in the market and boost sales. The whole supply chain requires confidence to buy diamonds.
Q. Trade policies can change rapidly. How confident are you that this 0% tariff status is a sustainable, long-term agreement, or is the industry preparing for potential future policy shifts?
This is a difficult question. But as an optimist, I believe that the current status for diamonds manufactured in Europe will remain in place and that other nations will eventually secure favorable bilateral trade agreements with the United States, in the interest of the entire industry.
