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The head of the world’s largest diamond company has expressed his belief that the US will lift the tariffs in the precious stones that he believes have no “benefit” for the country.
Al Cook, the chief executive of De Beers, told Financial Times that there was no “no job for diamond mines in the US” and that the company had conducted discussions with some governments on the issue.
The tariffs had no “benefit” for the US and “would simply be a consumer tax for the US consumer,” he said. “There would be no work created.”
SH.BA is the world’s largest diamond jewelery market, which is about half of the global demand, but there are no local mines or well -known trading stones deposits.
Tariffs announced last month by President Donald Trump have dumped the diamond industry in the riots and briefly brought trade to gems to a “stop”, according to market participants.
The World Diamond Council, a lobby group representing the industry, today warned that $ 117 billion in annual income, as well as 200,000 US jobs in the jewelery sector would risk if the US would not lift the fees in stones.
“Diamond tariffs would function as a consumer tax, raising prices in engagement rings, anniversary gifts and other jewelery,” the group said in a statement Monday that asked the White House to exclude gems from new import tasks.
Diamonds entering the US are subject to 10 percent of all imported goods, and face a variable country -based tax that has been suspended for 90 days.
Many raw materials were excluded from tariffs, but diamonds were not – adding pain to an industry that was accumulating with a decrease in demand and competition from synthetic diamonds, which can be produced at a cost.
Because diamonds are so small and valuable, they are often flying around the world in a complex supply chain extending from the mines to places such as Botsvana or Angola, in Lustration Centers in India, in jewelery stores in China or SH.BA – which makes them very sensitive to trade disruptions.
The shameful market conditions and tariff breaks come in a particularly sensitive time for De Beers, as she prepares to leave her parent company, the American Anglo ranked in London, either through a sale or through a public offer.
Anglo is set to launch an official sales process for de Beers “very quickly,” Cook said. The company is preparing at the same time for an IPO which can take place until the beginning of next year, he added.
De Beers reported revenue from the first quarter of $ 520 million, which was 44 percent under the same period a year earlier due to lower prices and sales volumes.
Anglo American has twice written the value of De Beers in the last two years, receiving a $ 2.9BN depreciation fee in the February Diamond Unit and a $ 1.6bn injury last year.
Cook acknowledged that the fees had had “an impact” on the diamond industry, but said it was not “as drastic as it could be”.
“People are quite sure that in the long run, diamonds will be excluded from tariffs,” he said.
“The US has been quite clear that natural resources produced outside the United States are not tariff objectives.”
Cook’s comments come after the White House has given some ground over tariffs giving exceptions to articles such as intelligent phones and vehicle components.
Positive noises from the trade talks between the US and India – the world’s largest diamond polisher – also suggest that a comeback can be near.
A trade agreement between New Delhi and Washington can facilitate one of the highlights of the dots along the diamond supply chain because India polishes more than 90 percent of the world’s diamonds and is a leading exporter to the US
