Israel’s diamond industry, one of the country’s historic export pillars, is warning of an unprecedented crisis that leaders say could threaten the livelihoods of its 6,000 workers unless the government intervenes quickly.
Nissim Zuaretz, president of the Israel Diamond Exchange, said the industry faces an “existential threat” after the United States lifted tariffs on diamonds from Belgium and the European Union but not from Israel.
“The government must wake up,” Zuaretz said. “When the U.S. removes tariffs from Europe but leaves Israel out, it’s like telling us we’re no longer relevant. Israel is one of the four largest diamond exchanges in the world. If tariffs were lifted for Europe, Israel deserves the same. This isn’t just an economic issue — it’s a matter of national pride collapsing before our eyes.”
The U.S. currently imposes a 15% tariff on Israeli diamonds, a policy dating back to tariffs introduced during the Trump administration. Diamonds imported from the European Union, by contrast, enter the U.S. duty-free.
The exchange and industry representatives are calling on the Prime Minister’s Office, the Finance Ministry, and the Economy Ministry to negotiate with Washington for an exemption on diamond imports, similar to that granted to Europe. They also want foreign companies operating within the Israeli Diamond Exchange to be exempt from corporate tax as part of a proposed free trade zone.
According to exchange data, imports of polished diamonds fell 32.9% over the past year, while exports dropped 35.7%. “These aren’t just numbers,” Zuaretz said. “They represent 6,000 families on the verge of losing their livelihoods. This is a generational legacy crumbling while the government ignores the reality.”
Zuaretz said some diamond traders are already struggling to survive. “People who worked in this industry for 20 or 30 years, who built businesses and raised families from diamond profits, suddenly find themselves without income,” he said. “If no one in the government wakes up, thousands will soon lose their jobs.”
The diamond industry exports about $3.5 billion annually to the United States, accounting for roughly 8% of Israel’s total exports.
Zuaretz described the current situation as “a real alarm before an entire export industry collapses.” He said the industry has been battered by a series of blows — the COVID-19 pandemic, the Russia-Ukraine war, the Israel-Hamas war that began in 2023, and now the U.S. decision to remove tariffs for Europe alone.
“I’ve been in this industry for 30 years,” he said. “This is the worst crisis I’ve ever seen. I’m not talking about a temporary downturn — I’m talking about the complete extinction of an industry that was once the pride of the State of Israel.”
Zuaretz welcomed recent remarks by Finance Minister Bezalel Smotrich in support of establishing a diamond free trade zone, calling them “the first light at the end of the tunnel.” He also praised Israel Tax Authority director Shay Aharonovich for backing the initiative but said action must follow. “Now we need deeds, not just words,” he said.
He added that a free trade zone could attract foreign investors, create jobs, and restore Israel’s position in the global diamond market. “Look at Dubai,” Zuaretz said. “They set up a diamond free trade zone in 2002, and today 25,000 companies are registered there. The Abraham Accords opened opportunities but also created direct competition with Dubai. Now is the time to face that challenge, not run from it.”
Despite the crisis, Zuaretz noted that many of the world’s most famous diamonds — including those worn by top athletes and celebrities — are still polished in Israel. “The global industry is thriving, but we are slipping backward,” he said.
“My message to the government and the public is clear: it’s now or never,” Zuaretz said. “We have a golden opportunity to restore Israel to the center of the global diamond industry, but the window is closing fast. Every day without government action means another diamond dealer lost, another family without income, another piece of our national heritage gone.”