By Erin Levi
As the world — and stock market — reels from President Trump’s sweeping tariffs, precisely intended to shake up the global economy, one corner of Midtown Manhattan is feeling surprisingly optimistic. The Diamond District along 47th Street—a Bukharian Jewish stronghold—is poised not just to weather the economic storm but potentially experience a revival.
Michael Nektalov (known professionally as Mike Nekta), a third-generation jewelry dealer at Leon Diamond, has witnessed the district’s gradual decline over recent decades. Yet where others see disruption in the new tariff policies, Nekta sees opportunity.
«I like when things are shaken up, we look for new opportunities. That’s what entrepreneurs do,» says Nekta. «You have to adapt and keep it moving. It’s not the first time we’ve experienced a shakeup.»
Trump’s recent round of tariffs has created immediate uncertainty across numerous industries, including the luxury jewelry sector that relies heavily on global supply chains. The impact is particularly significant given that diamond prices have already reversed to multi-year lows after surging during the pandemic, according to recent industry analyses from McKinsey & Company.
The Diamond District, once the epicenter of American jewelry manufacturing, has contracted as production shifted overseas to countries like Thailand, India, Hong Kong, and China. Industry reports indicate that natural diamond production is expected to grow at only 1-2 percent annually until 2027, well below previous trends of 3-4 percent.
But Nekta believes tariffs might ultimately help «level the playing field» for domestic dealers and manufacturers who have been competing with international sellers in the internet age.
«Anyone who has inventory on this side of the border has more opportunities to sell,» Nekta explains. «If you want to have something made in Hong Kong, it will take forever to get made and shipped—about eight weeks. But we have the capability to finish items locally. One week is more than enough time to complete an engagement ring here.»
Hiski Mierov, 38, sales manager at third-generation family-run Malidani Jewelry Corp, has already noticed immediate effects. «Some of our vendors stopped giving out merchandise last week because they need to find out what their replacement values will be for importing goods from overseas,» Mierov reports. «We’re not able to get different kinds of castings and gold materials, and I’ve seen other jewelry stores already implementing a 25% price hike on products.»
While Mierov, who also serves as Vice President of the Bukharian Jewish Community Center Synagogue, is more cautious about the tariffs’ impact, viewing them hopefully as «just a power play» that will eventually end, he doesn’t believe they will dramatically change the diamond world. «Lab-grown diamonds changed the diamond market far more significantly,» he notes. «I don’t think tariffs will affect the diamond market as much as people think.»
For luxury consumers, Mierov points out that a modest price increase isn’t likely to deter purchases. «If you need a gift or engagement ring, whether it costs $1,000 more or less doesn’t significantly impact luxury customers,» though he acknowledges the pricing pressure will eventually be «passed down to the consumer.»
These market dynamics are playing out against a backdrop of changing consumer preferences. Younger buyers, particularly Generation Z, are increasingly drawn to ethical sourcing and digital shopping experiences. Industry research suggests that one-third of fine jewelry purchases could be influenced by environmental, social, and governance (ESG) factors by 2025—potentially making domestically produced jewelry more attractive to conscious consumers.
New York City’s Diamond District thrives on relationships, tradition, and legacy. While the core is built by Jewish families—Bukharian, Hasidic, Syrian, Israeli—it’s strengthened by the international diversity from India, Lebanon, Korea, and Latin America. «It’s one of the only places where a deal might be closed in a mix of Hebrew, Farsi, Russian, Hindi, and English—all in a single conversation,» says Nekta.
Nekta’s perspective on tariffs stems partly from his early adoption of technology to remain competitive. For 15 years, he has invested in high-tech machinery—what he calls «robots»—including CNC and automated diamond-setting machines that allow him to maintain New York-based production.
«These precision diamond setting machines help us compete with cheap labor overseas,» Nekta explains. «If a piece has 300 or 400 diamonds, the labor costs add up. As an entrepreneur, you have to find new ways to compete. When you get pushed against the wall, you find a new way to do things.»
In a recent blog post, Nekta elaborated on his optimistic view: «These policy shifts could spark a revival of domestic jewelry manufacturing, which means the New York Diamond District might stop shrinking and start expanding again. That’s something I care deeply about. My family never liked seeing the Diamond District fade, which is why we converted an old bank space into a new jewelry exchange—creating a space for more than 30 independent jewelry businesses to thrive.»
Unlike industries that depend on continuous production and perishable goods, the diamond trade has another inherent advantage during trade disruptions. «It’s not like eggs that you have to keep producing, that spoil after a certain time,» Nekta points out. «Diamonds are more resilient—there’s more than enough inventory on this side of the border. If tariffs stick around long enough, more production will happen here, creating more work for diamond setters, polishers, and everyone involved in jewelry service and production.»
Nekta believes the tariffs are primarily a negotiation tactic—part of Trump’s strategy to extract concessions and rebalance trade agreements. «I feel like these tariffs are not forever; they’re being used to trade concessions with other countries. If they do more damage than good, they can always be repealed, canceled, or changed.»
He also emphasizes America’s trade imbalance: «The country has been operating at a deficit for a while. I’m glad someone’s trying to do something about it.»
Both Nekta and Mierov agree that the diamond industry has weathered more significant disruptions, including the COVID-19 pandemic. When physical stores closed, the industry pivoted to internet sales, which «started booming like crazy,» according to Nekta. «We doubled down on internet and social media, showing we were capable of shipping things, FaceTiming people, Zooming, shipping things overnight. It was fine!»
The inherent nature of diamonds—their durability and longevity—also provides economic resilience. «People have been buying diamonds for more than one lifetime,» Nekta says. «Generations pass, but their diamonds stay, either they use them, sell them back, or they get repurposed. Diamonds get reused. It’s not like eggs or milk that you keep consuming.»
For now, the Diamond District remains watchful but optimistic. In an industry built on pressure transforming carbon into brilliance, perhaps it’s fitting that external economic pressure might just help America’s diamond trade shine with renewed strength.
«Entrepreneurs don’t sit back,» Nekta concludes. «We adapt. We build. And we seize opportunities in any environment.»
And remember: Diamonds are forever.