The Inexplicable, Bilateral Diamond Trade Through the U.S.
Three countries dominate the diamond trade in and out of the U.S: India, Israel, and Belgium.
In 2021, India imported $16 billion worth of unset, nonindustrial diamonds into the U.S. In 2014, Israel imported over $9 billion. Belgium imported almost $4 billion that same year.
Not only are those numbers massively large—the total world diamond market is only valued at around $96 billion—but strangely enough, an equivalent amount gets exported right back out of the U.S.
For Belgium in 2014, the amounts imported ($3.94B) and exported ($3.68B) were almost exactly the same. Since 1992, the net import of diamonds through the U.S. is $155 billion without accounting for inflation.
Few diamonds are currently produced in the U.S. According to data from the U.S. Geological Survey (USGS), the total production of diamonds in the U.S. was $150 million in 2022, with over 99 percent of that being diamond grit, dust, powder and bort—imperfect, non-gem quality diamonds for industrial use—not stones.
Diamonds are the largest traded commodity with Israel, sometimes dwarfing the $3 to $4 billion the country receives in U.S. foreign aid every year, leading to a regular trade deficit.
Not only are the import and export amounts both large for the top three countries, imports follow exports in parallel. As more gets imported into the U.S. from that country, more gets exported out. For India and Israel, they have Pearson correlations in the 90s (.98 and .93 respectively). For Belgium it was .84.
Belgium and Israel are well known for their diamond cutting and polishing industry, with India and China gaining a larger foothold. But the amounts being traded appear to make any connection to the legitimate diamond trade seem improbable.
If the consistent flux in diamond trade was the result of diamond finishing, Belgium appears to add little value in the process, while India and Israel would ostensibly have a $5 billion a year industry solely based on finishing gems. India is considered a major jewelry manufacturer yet it appears to be exporting a large amount of its gems unset—not fitted into jewelry.
Unilateral Trade
Not all of the massive diamond trade is bilateral like that. For countries like Botswana and South Africa that actually produce diamonds, exports rarely top a billion dollars in a year, and diamonds exports into those countries are negligible.
Then there are other countries that receive billions in diamonds but don’t reciprocate.
The U.S. exports billions in diamonds to places like Hong Kong, Switzerland, France, United Kingdom, and the United Arab Emirates, with only a percentage of it coming back into the U.S.
The tiny island of Mauritius sees about half a billion in diamonds imported with no conceivable diamond industry to speak of. The island country has struggled to shed its name as a money laundering haven for years and was only removed from the European Union's list of high-risk third world countries in 2022.