The Diamond’s Double Edge: Navigating a World of Tariffs and Sanctions
In the hushed, climate-controlled conference rooms of New York City, where the world’s most powerful diamond trade leaders had gathered for the World Federation of Diamond Bourses presidents’ meeting, the air was thick with a tension that had little to do with the carats and clarity of the stones that built their empires. The glittering, multi-billion-dollar diamond industry, a trade built on ancient allure and timeless promises, found itself grappling with the very modern and brutal realities of geopolitics. The conversation wasn’t about the Four Cs, but two S’s: Sanctions and Surcharges. The looming specters of U.S. tariffs and sweeping sanctions against Russian diamonds dominated the agenda, forcing a notoriously fragmented and traditionalist industry to confront its precarious position in a rapidly changing global landscape.
A panel on international trade challenges became the crucible for these anxieties. Here, industry titans spoke not with the bravado of market leaders, but with the cautious tones of strategists navigating a minefield.
The Tariff Tightrope: A Call for a Unified Front
The first major storm on the horizon was the threat of U.S. tariffs, a policy tool wielded with unpredictable force by the Trump administration. For an industry whose very lifeblood is the free, cross-border movement of goods, the prospect of new import taxes was a dagger aimed at its heart. Feriel Zerouki, a formidable figure holding dual roles as the president of the World Diamond Council (WDC) and De Beers’ chief trade and industry officer, laid bare the industry’s initial, and nearly fatal, disarray.
“We knew the issue of tariffs was going to come our way,” she stated, her words carrying the weight of her experience at the nexus of corporate and regulatory worlds. The problem, she explained, wasn’t just the external threat from the government; it was the internal division. A diamond’s journey from deep within the earth to a velvet-lined box is a long and winding one, involving miners, sorters, cutters, polishers, and retailers. Each stage has its own economic pressures and priorities.
“Within the trade, everyone wanted something different when it came to tariffs,” Zerouki continued, painting a picture of an industry at odds with itself. “Some wanted exemptions on the rough, some wanted exemptions on the polished.” This seemingly minor distinction reveals the deep fault lines in the supply chain. A rough diamond producer in Botswana or a trading house in Antwerp, for instance, would lobby for tariff-free movement of uncut stones. But a cutting and polishing hub like Surat, India, which adds immense value to the stone, would want its finished, polished product to enter the massive U.S. consumer market without penalty.
Zerouki knew that presenting this fractured plea to Washington would be disastrous. “One certain way of not achieving success was for the same industry to call for different things,” she emphasized. “We called for unity.” The WDC’s primary task became one of internal diplomacy: convincing disparate, often competing, factions that a single, unified voice was their only hope. The consensus they painstakingly forged was that all diamonds, whether rough or polished, should be able to move across borders tariff-free. It was an argument for the seamless, global nature of their business.
However, as Zerouki pointed out, gaining a sympathetic ear in the corridors of power is a monumental challenge. “Every single industry out there is saying they are special and are asking for an exemption.” The diamond trade had to prove it was uniquely vulnerable, a task made more difficult by the public perception of diamonds as indestructible symbols of luxury, not fragile cogs in a complex global machine.
Sara Yood, the sharp and pragmatic president and CEO of the Jewelers Vigilance Committee (JVC), echoed this sentiment, urging the assembled leaders to become proactive advocates. “I would strongly consider those that are here to communicate with your member of Congress,” she implored. Her point was clear: personal engagement is critical. Yood noted that despite years of dialogue, many government officials and their staff remained shockingly “not well-versed in how diamonds move across borders.” They needed to be educated on the intricate dance of a diamond’s life—from a mine in Canada, to a sorting office in Belgium, to a cutting wheel in India, to a jewelry workshop in Italy, and finally, to a showroom in Ohio. A tariff, she argued, wasn’t just a tax; it was a disruption that could send shockwaves through this entire delicate ecosystem.
Yood also provided a crucial legal update on the Trump-era tariffs, explaining that while the Court of International Trade had initially struck them down, an appeals court had stayed that decision. “They just allow the current tariffs to continue to be collected until the case is heard,” she clarified, predicting a long legal battle that would “likely go all the way to the U.S. Supreme Court.” For businesses caught in the crossfire, this meant meticulous bookkeeping was no longer just good practice—it was a survival tactic. “Anyone who pays the tariffs will be entitled to refunds if they are struck down again,” Yood advised. “That shows the need to keep incredibly detailed records.”
While some fretted, others projected a stoic calm. Gaetano Cavalieri, the venerable president of CIBJO (the World Jewellery Confederation), declared he was “not scared” of tariffs. His logic was simple and based on fundamental economics: the United States has no significant diamond mining of its own. If tariffs are imposed, he reasoned, the cost will inevitably be passed on to the end consumer, who ultimately foots the bill for the government’s policy. Matthew Swibel, vice president of sustainability and social impact for retail giant Signet Jewelers, offered a more corporate perspective, noting that his company had thus far absorbed the costs, avoiding price hikes “because of the supply chain relationships we have and the relationships we have with a lot of our top suppliers.” But this was a strategy only the largest players could afford, leaving smaller businesses exposed.
The Sanctions Shadow: The Unraveling of Global Consensus
If tariffs represented a direct economic threat, the issue of sanctions against Russian diamonds introduced a far more complex geopolitical and ethical dimension. The G7 nations’ efforts to choke off a key revenue stream for Russia following its invasion of Ukraine had thrown the industry into a state of high alert. The challenge was how to effectively ban Russian diamonds—which account for roughly 30% of the world’s rough supply—from G7 markets without crippling the entire industry or creating an unworkable system.
Here, the panel revealed a growing schism, particularly concerning the United States’ role under a potential new administration. Ahmed bin Sulayem, chair of the Kimberley Process and a key architect of Dubai’s rise as a diamond hub, noted a palpable shift in Washington’s focus. A new administration, he suggested, “has different priorities.” The unified front of the G7 was beginning to fracture. “We see the G6 going one way, we see the United States going another,” he observed, articulating a fear that the U.S. might abandon the collective sanctions effort in favor of its own path.
Sara Yood concurred, acknowledging the political reality. “Clearly the political climate has changed,” she said. “From my perspective, we’re seeing less engagement with the U.S. government on this issue.” However, she issued a stern warning: existing prohibitions against Russian diamonds, such as those implemented by executive order and OFAC (Office of Foreign Assets Control) regulations, remain firmly in place and demand strict compliance. She also cautioned against any naive optimism that a ceasefire would lead to a swift return to normalcy. “Even if Russia’s war with Ukraine ends tomorrow, that doesn’t mean sanctions will,” she stated grimly. “Sanctions are incredibly difficult to unwind.” They are tangled webs of law and diplomacy, and untangling them is a slow, arduous process.
Matthew Swibel of Signet directed sharp criticism at some of the early G7 proposals, which he deemed unworkable and counterproductive, particularly those that relied on a “single node” system. This concept, which would have forced most of the world’s diamonds to be funneled through a single geographic point (like Antwerp) for certification, was met with fierce resistance. “Putting a sticker on a box was not effective, efficient, or enforceable,” Swibel said dismissively. He argued that such a system would create catastrophic bottlenecks, drive up costs, and fail to achieve its core purpose. “The definition of diamond traceability is to know what the origin is. What was being proposed did not achieve that.” It was a bureaucratic solution to a complex supply chain problem, one that ignored the realities on the ground.
The Digital Frontier: A Quest for Unbreakable Traceability
This discussion of flawed sanctions naturally led to the ultimate holy grail for the modern diamond industry: true, unassailable traceability. For decades, the Kimberley Process (KP) has been the primary mechanism for preventing the trade of “conflict diamonds.” Yet its limitations are well-known. Its paper-based certificate system is seen as archaic and vulnerable to forgery, and its mandate is narrowly focused on diamonds funding rebel wars, not broader human rights or environmental concerns.
Ahmed bin Sulayem spoke of the KP’s ongoing effort to drag itself into the 21st century by digitizing its certificates through a platform called Verifico, developed in the UAE. But his tone was one of weary realism. Change, he implied, comes at a glacial pace. “It’s an ongoing discussion,” he said, a diplomatic phrase for a long and difficult road ahead.
Feriel Zerouki elaborated on the immense scale of this challenge. “It takes time for one company to develop a digital platform,” she said, drawing a powerful analogy. “Here we are talking about a change that affects 86 countries.” Getting nations with vastly different levels of technological infrastructure, political will, and economic interests to agree on and implement a single digital standard is a Herculean task. Yet, she concluded with the industry’s guiding philosophy, a mantra born of necessity: “From a trade perspective, we never look for perfection, we are focused on continual improvement.”
As the panel concluded, the message was clear. The diamond, that eternal symbol of strength and purity, is mined, cut, and sold in a world that is anything but. Its future value will be determined not only by its brilliance and fire, but by the industry’s ability to prove its integrity. The conversations in that New York room were a microcosm of a global struggle—a fight to build a transparent, ethical, and resilient supply chain capable of withstanding the immense pressures of an uncertain world. The trade that has survived for centuries must now evolve, or risk being shattered by the very forces it once thought it could ignore.
