New York: Donald Trump’s policies as U.S. president are expected to boost diamond sales as the trickle-down effect of lower taxes will support luxury demand, according to De Beers chief executive officer Bruce Cleaver.
“It’s likely to be positive, certainly in the short-term – lower taxes, more jobs, translates into more disposable income and translates into more diamond purchases,” Bloomberg cited Cleaver as saying in an interview.
Even without this potential boon, Cleaver said diamond jewelry sales are likely to increase “a little bit” next year after being flat or slightly lower in 2016, partly a consequence of the U.S. dollar’s strength, Cleaver told Bloomberg.
In the longer term, the industry will be supported by the prospect of growth in demand outperforming expansion in diamond supply by 2018 or 2019, as there is no sign of supply being anything other than flat, the executive said.
But, even as deregulation supports U.S. business, the effect of Trump’s policies may make commodities more expensive overseas as the dollar strengthens. Consolidation is therefore likely in the polished manufacturing and retail sectors of the diamond business, Cleaver added.
