Even with the suspension of US tariffs on Botswana, a wave of anxiety sweeps through Botswana’s diamond cutting and polishing industry. The U.S., which accounts for up to 50 percent of global natural diamond jewelry consumption. As one of Botswana’s most critical destinations for polished diamonds, the American market plays a pivotal role in sustaining the local industry. Tariffs threats by Donald Trump come at a time when demand for diamonds is already weakening in other key markets such as China, the Middle East, and Europe.
Siddharth Gothi, Chairman of the Botswana Diamond Manufacturers Association (BDMA), noted that most diamonds polished in Botswana are exported to the U.S. He warned that the new tariffs could devastate an already fragile sector, which has been reeling from sluggish demand in both the U.S. and China.
Approximately 40 sightholders operate in Botswana, and the cutting and polishing industry has become a key driver of economic growth, supported by De Beers’ partnership with BDMA members. This collaboration has enabled Botswana to transform rough stones into polished diamonds domestically, which has in turn stimulated job creation. Employment in the sector surged from 2,207 in 2022 to 4,239 in 2023, underscoring its importance to the economy.
However, given the labor-intensive nature of diamond cutting, the threat of job losses looms large. The BDMA has warned that a significant decline in U.S. demand could lead to factory closures, dealing a severe blow to employment.
“The only measure to protect jobs is to save the factories from closing. And this can only be achieved if Botswana goes back to a zero tariff as earlier,” Gothi said.
He added that shifting exports to alternative markets such as the UAE or India, which face lower tariffs, is unlikely to ease the pressure.
“If the diamonds are polished in Botswana, the country of origin will be Botswana. Irrespective of which country exports to the U.S., the country of origin will remain Botswana. And those goods will be taxed as per Botswana’s tariffs,” he explained.
The tariff crisis also comes at a time when Botswana is aggressively pursuing economic diversification and deeper local beneficiation of its mineral wealth. In line with this ambition, the new agreement between De Beers and the Government of Botswana includes a transformational package aimed at bolstering domestic value addition within the diamond industry. Key initiatives include the establishment of a diamond jewellery manufacturing facility, a diamond grading laboratory under the De Beers Institute of Diamonds, and a vocational training institute to build local skills in collaboration with industry partners.
These initiatives align with the government’s broader industrialisation strategy, as outlined by Minister of Finance, Ndaba Gaolatlhe, during the recent budget speech, where he noted that while diamond revenues have long underpinned Botswana’s economy, they have also exposed it to volatility. Gaolatlhe emphasised that the economy must diversify by expanding key sectors such as manufacturing.
“A central pillar of this strategy is the diversification of the mining sector and an aggressive drive for mineral beneficiation,” he said. The goal is to add value to its commodities before exporting them.
Trump is using tariffs to boost the US’ manufacturing sector. Botswana also during its budget speech emphasised its goal to grow this sector as well.
However, the goal faces growing uncertainty of trading partners which include the US.
Diamond industry feels that no market can match the U.S. in absorbing the volume of diamonds Botswana produces.
“Mitigation strategies will only come from lowering the tariffs, as the U.S. is the world’s largest consumer of natural diamonds. No other market can substitute for the loss of sales from the U.S.,” Gothi asserted.
The higher tariffs may also drive local factories to relocate to diamond-cutting hubs with lower duties, further threatening domestic employment. Botswana already faces stiff competition from countries like India, which offers lower labor costs and a deeper pool of skilled workers. Gothi cautioned that Botswana’s competitiveness is hampered by these structural disadvantages.
With demand from China already in decline, U.S. tariffs are expected to further deepen the downturn. Gothi believes the impact could be severe.
“These tariffs will make the situation worse from here. Especially after the past two-plus years of a slow market,” he said.
Looking ahead, Gothi argued that the sector’s viability depends on Botswana securing the lowest tariff regime among diamond-cutting centers. Should the U.S. maintain the current tariffs beyond 2025, the long-term sustainability of the industry could be in serious jeopardy.
The BDMA is urging the government to act swiftly. Gothi revealed that the association has already submitted letters to the Ministry of Minerals and Energy, as well as the Ministry of Trade and Entrepreneurship, outlining their concerns. Botswana has also reached out to the U.S..
“We have also held meetings with Business Botswana to express our concerns with the tariffs,” he disclosed.
The government has acknowledged the urgency of the situation. Minister of Trade and Entrepreneurship Tiroeaone Ntsima recently reassured the public and the business community that Botswana is actively engaging the U.S. government in an effort to resolve the matter through diplomatic channels.
These concerns resonate across the region. The Southern African Development Community (SADC), to which Botswana belongs, has voiced alarm over the economic impact of the tariffs on its 16 member states and announced plans for a collective response. Though the tariffs vary in severity, they are widely expected to disrupt trade and threaten economic stability across the region.
Neighboring countries within the Southern African Customs Union (SACU)—South Africa, Namibia, Lesotho, and Eswatini—are also feeling the strain. Tariffs range from 10 percent for Eswatini to a punishing 50 percent for Lesotho. South Africa, which faces a 31 percent tariff, has called for urgent trade talks with the U.S. and is advocating for a new bilateral agreement to replace the soon-to-expire African Growth and Opportunity Act (AGOA). Namibia, with a 21 percent tariff, is exploring SACU-wide coordinated responses. Lesotho has warned that its diamond and textile exports could collapse under the weight of the 50 percent levy, posing a serious threat to its already fragile economy. Even Eswatini, facing the lightest tariff at 10 percent, is evaluating the broader implications.
U.S. President Donald Trump has since announced a temporary reduction of tariff rates to 10 percent on imports from most trade partners for a period of 90 days, creating a brief window for negotiations.
“More than 75 countries have called to negotiate a solution to trade and tariffs, and have not retaliated, at my strong suggestion,” Trump said in a statement.
For Botswana’s diamond cutting and polishing sector, this pause could be the narrow opportunity needed to press for the restoration of zero-tariff status. The BDMA maintains that such a move is critical for the survival of the industry.
