Antwerp Can Import Polished Diamonds to U.S. Tariff-Free

Diamonds polished in Antwerp will not be tariffed when imported into U.S., thanks to a new executive order—which exempts diamonds from certain tariffs—and to the European Union’s trade agreement with the U.S.

The notice exempting diamonds and gemstones polished in the EU from tariffs is due to be published tomorrow in the Federal Register. The exemption is retroactive to Sept. 1. Prior to then, gems polished in the EU were subject to a 15% duty.

For the moment, the zero tariff only applies to diamonds polished in the European Union and not anywhere else, including the United Kingdom or Japan. It does not affect jewelry. It does include rough, but the rough would have to be mined in the EU.

Antwerp World Diamond Centre CEO Karen Rentmeesters tells JCK the change could give the city a short-term boost.

“There are about 350 polishers in Antwerp,” she says. “We can’t replace the millions of people who are working in India, but this is at least an interesting opportunity for Antwerp to bring back some of the polishers who have been inactive for the past couple of years. Polishing and the expertise behind polishing has always been part of our DNA.

“One thing I’ve learned is that in this business, people will go to great lengths to get a great deal,” Rentmeesters adds. “So when something like this happens, people will make moves.”

Antwerp currently exports $2.1 billion in polished diamonds to the United States a year, and Rentmeesters says it’s believed about half of those diamonds are polished in Belgium, thereby qualifying for the zero tariff.

However, over 90% of the world’s diamonds are polished in India—whose imports to the U.S. are now subject to a 50% duty. Those diamonds could also receive a zero tariff if India signs a trade deal with United States.

Rentmeesters says that despite the current situation being possibly helpful for Antwerp, “it would be better for the entire industry if diamonds are universally exempt [from tariffs]. It’s important for diamond producers that have beneficiation strategies. If India has tariffs, that will affect us in Belgium.”

And she cautions that the ongoing trade war has proved unpredictable.

“The warning I give to people,” she says, “is this could change overnight.”

(Photo courtesy of Antwerp World Diamond Centre)