Economic researchers at local economic consultancy firm, Econsult, conclude that diamond market prices are set to rise under the Trump administration mainly driven by proposed reciprocatory tariff plans. Currently, Botswana’s diamond exports to the US face a 10% tariff, whether direct or indirect up from zero. From July, unless the proposed tariff regime changes, they will face tariffs of 37% if direct from Botswana or 26% if indirect via India. “The impact will be to raise diamond prices, which will reduce demand, and/or reduce profit margins in the industry,” researchers noted.
“The impact on demand is particularly worrying, especially given the weakness of the diamond market in recent years, and the hopes for recovery in 2025.” “Finally, the tariff differential between Botswana and India will make it unviable to cut and polish diamonds in Botswana where margins are already wafer thin –and instead it is likely that US-bound diamonds will be cut and polished in India.” The rough diamond pipeline which cradles from mines in Jwaneng and Orapa, leads to centres in India, Dubai and Antwerp before heading to the United States which accounts for about 54% of annual processed diamond demand. Trump’s tariff threat hovers above each of these centers, in turn throwing the carefully and optimistically calculated growth forecasts by the Finance Ministry into disarray. “Botswana’s external outlook remains uncertain, as it is closely linked to fluctuations in the diamond market,” the World Bank said in its Africa Pulse update.
