The Israeli diamond industry, one of the oldest and most significant in local exports, has been dealing with a shake-up in recent months. US President Donald Trump imposed a 15% tariff on Israeli goods, which made trade with the American market – the main export destination for diamonds from Israel (60%) – more complex and expensive. The sharp declines in import and export data, along with stagnation in political contacts with Washington regarding possible solutions, are causing real concern in the industry.
According to the data of the Ministry of Economy and Industry, the import volume of rough diamonds decreased by 18% in the first ten months of the year compared to the corresponding period last year, while the export of rough diamonds decreased by 16%. As far as polished ones are concerned, imports fell by 17.5% and exports fell by 27%.
“People here are collapsing”
“We worked with the Americans more than the government,” Diamond Exchange President Nissim Zoertz tells Globes. “There may be interests of those whose tariffs are good for them, but people here are in a state of collapse. We pushed, and the US administration says they introduced the exemption – but do not close the agreement for signature. If no one comes to sign, then maybe it’s good for them in the meantime.”
The main diamond markets in the world are Israel, Belgium, India and Dubai. At the beginning of September, as part of a presidential order, Trump reached a trade agreement with the countries of the European Union, including Belgium, which includes a tax exemption on polished diamonds imported to the US. The effects were immediately evident in local data, and in October, Israeli polished diamond exports dropped by more than 50%.
“The agreement is ready for signing, there is no logic here. Israel only needs to ask ‘where are they signing,'” says Zoertz, who defines the data as a “catastrophe”, and warns that the branch may close within six months. “Why should customers come to Israel? They can buy in India and polish in Belgium, and it will inevitably be 15% cheaper. People in the industry are in chaos, they have lost their livelihood and don’t know what to do. For about seven months now, no one in the country has done anything.”
In the shadow of the dire situation in the industry, the Chairman of the Economic Committee, MK David Bitan, came this week to visit the Diamond Exchange in Ramat Gan, and on Tuesday, the committee convened for an emergency discussion on the issue under the chairmanship of the chairman, MK Sasson Guetta. Customs benefit and exemption for the diamond industry.”
The promises were not promoted
The diamond industry received further government attention in September, when during a visit to the Diamond Exchange, Finance Minister Bezalel Smotrich stated that he intends to include in the 2026 budget a decision to make Israel a free trade zone for diamonds. “The country will lose taxes,” Smotrich said at the same time, “but the aggregate benefit, the ecosystem that will develop, will be able to contribute to Israel.” However, these days when the issue of the budget converges to the last row, it is evident that the issue is not a priority.
“We very much hope that the Minister of Finance will keep his word because without this thing the industry will die,” says Zoertz. “We don’t demand money from the state, we want to bring money into the state and bring in foreign investors.”
Nissim Zoertz, President of the Diamond Exchange / Photo: Shlomi Yosef
The Land of Israel became a center of activity in the field of diamonds in 1936, following the decision of the British Mandate authorities to abolish the customs duty on diamond imports. Israel and Belgium led the field for years until India and especially Dubai took the lead. The Emirates reached first place in the world based on two key steps: First, they studied the work model in the Israeli stock market, and adapted it to their needs. Second, in 2002 they established the Diamond Free Trade Zone.
Since the establishment of the free trade zone, 25,000 registered diamond companies have been founded there, which enjoy, for example, a full exemption from import, export and currency restrictions, along with a full exemption from personal or corporate taxes for at least 50 years.
The Ministry of Finance contacted the Tax Authority, which responded: “The tariff agreement with the US is still under negotiation, which is being conducted under the leadership of the National Economic Council in the Prime Minister’s Office, and for more information you should contact them. As far as the policy towards the diamond industry is concerned, and the composition of the measures included in the economic plan that accompanies the state budget, the Tax Authority operates in accordance with the policy outlined by the Ministry of Finance.”
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