Botswana Diamond Industry Faces Challenges as U.S. Imposes 15 Percent Tariff

Botswana Diamond Industry Faces Challenges as U.S. Imposes 15 Percent Tariff. Botswana’s diamond cutting and polishing sector is preparing for heightened strain after the U.S. government introduced a 15 percent tariff on polished diamond imports from the country, ending decades of duty-free access under AGOA and the Generalized System of Preferences.

The tariff, although reduced from an initially proposed 37 percent, poses a significant challenge for local diamantaires who are already navigating weak global demand and increasing competition from lab-grown diamonds.

Siddarthi Gothi, chairperson of the Botswana Diamond Manufacturers Association (BDMA), described the new duty as a heavy burden. “There is no breathing room for a 15 percent tariff from the previous 0 percent,” he said, emphasizing that the industry operates on extremely thin margins. He added that U.S. customers would ultimately bear the added costs, potentially impacting sales.

The announcement comes amid global headwinds, including slowing Chinese retail sales, falling demand for rough and polished diamonds, and a rise in lab-grown stones, now estimated to represent around 25 percent of the U.S. market. While Botswana primarily exports diamonds to India, Belgium, and the UAE, the U.S. remains a high-value market for polished stones.

Gothi highlighted the wider impact on local employment and operations. Job numbers have fallen from over 4,000 in 2023 to approximately 2,500 in 2025, while at least 20 cutting factories have closed temporarily or permanently in the past year. Declining prices and uncertainty around tariffs continue to pressure the sector.

The World Diamond Council is lobbying for exemptions, but Botswana’s industry may face continued uncertainty until negotiations progress. Gothi stressed that maintaining the country’s competitive advantage—including low-cost labor, investor-friendly governance, and ease of doing business—remains critical to retaining investors and sustaining the midstream diamond sector.