Israel’s diamond industry is going extinct. That’s a billion-dollar problem for the IDF.

by Inside China Business [12-24-2025].

The Israeli diamond industry is collapsing, as high tariffs and strong competition in the US market are crippling demand for natural stones from Israeli firms.

The US - Israel diamond trade is crucial to Israel's economy, and the industry even directly supports the Israeli Defense Forces with over $1 billion a year. Moreover, the diamond trade in Africa is financed with illicit weapons sales and training by IDF commanders.

India replaced Israel as the top exporter of natural diamonds ten years ago, and Chinese-made artificial diamonds are increasingly preferred by younger buyers.

The market situation in the United States and the war in Gaza led to a collapse in Israeli lending and investment in the sector, which is now at historic lows. Wholesale diamond buyers are reluctant to visit Israel, and its annual diamond show was recently canceled.

Closing scene, Fudan University, Shanghai

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