US President Donald Trump's dramatic declaration has shook a new and comprehensive tariff plan, which raises concerns in the Israeli Finance Ministry. This morning, the Minister of Finance, Bizallil Smotrich, will hold a meeting of senior officials to discuss “the effects of Israel's decision and examine the necessary follow -up steps,” according to the ministry's statement. For Israel, the new reality represents a special challenge – the United States is the main export destination for Israeli goods, and more than 25 % of all Israeli commodities exports are sold there.
What is Israel's position in the tariff plan?
According to the American announcement, Israeli products will undergo a 17 % tariff, which is calculated according to the trade deficit between the two countries – in other words, the difference between exporting goods from Israel to the United States and importing goods to Israel from the United States.
The difference is relatively low compared to China (54 %), the European Union (20 %), Japan (24 %), India (26 %) but it is higher than the basic definitions that will be shipped in many other countries including Turkey. Other countries that have come at a cheap price of the new Trump tariff are the United Kingdom, Saudi Arabia, Singapore, Brazil and the United Arab Emirates.
How important is the United States for Israeli exports?
The United States is undoubtedly a major export state and the most important Israel. Israeli exports to goods to the United States last year amounted to $ 17.3 billion, which constitute about 26 % of the total export of Israeli goods (except for service exports). In comparison, exports to the second country on the list, Ireland, amounted to only $ 3.2 billion and China in third place with $ 2.8 billion.
Was Israel's recent movements to reduce definitions effective?
Israel has moved two main in recent days to improve its position. One of them is to cancel the full definitions of imports from the United States, and the second is to expand import reform to include American standards.
However, the moves were made by the government at the last minute. The definitions were canceled by Israel on the eve of Trump's announcement and still requires legislation in the Knesset, so it will not be mentioned at all in the American report in the chapter on Israel.
The Ministry of Finance estimates that these steps may help in negotiating the American administration. According to the information contained in the possession of the Ministry of Finance, the Americans are open to talks with various countries to reduce definitions with a minimum of 10 %. However, unlike the European Union and other countries, Israel is certainly not planning to impose a retaliatory tariff on American products.
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What steps are Israel plan to take after that?
The professional teams in the Ministry of Finance have already started studying industries and factories that can be greatly affected, and where government intervention is required. Smotrich spoke with the president of the Ron Tomer Manufacturers Association, and the parties will make up a business plan.
At the same time, the Ministry of Finance recommends to act as soon as possible to open the official negotiations with the American administration to reduce the definitions. Professional sources estimate that there is an opportunity to reduce the tariff rate, because the American administration has not yet taken into account the last minute steps to eliminate Israeli definitions, or perhaps expanding import reform.
What is the economic importance of the duty of 17 % on Israeli exports?
A very large possible blow. If we look at a 17 % tariff on the volume of goods exports from Israel to the United States (about $ 17.3 billion in 2024), this is up to a possible annual cost of about $ 2.9 billion. It is important to note that the customs tariff applies mainly to goods, not services, so services exports (mainly with high technology) will not be affected, which was $ 16.7 billion in 2024, directly with tariffs.
The cost of customs tariffs will reach directly to the American consumer, assuming that exporters do not absorb the full cost of increasing prices. The question is how will the price increase affect the competitiveness of Israeli products?
Will there be opportunities for Israel in the new situation?
On the one hand, products made in Israel will become more expensive compared to local American products. On the other hand, the fact that the tariff for Israel (17 %) is less than those imposed on the European Union (20 %) and other countries may make some Israeli industries more attractive.
So despite the challenges, some opportunities can also be identified. However, there is a state of great uncertainty about the response of the European Union and other countries to the American move, and how the World Trade War can affect the global economy in general and the Israeli economy in particular.
What goods are exported from Israel to the United States?
The imposition of definitions on products from Israel is a threat to the main industries in the economy. According to the Central Bureau of Statistics, the main categories of exports to the United States are machines, electrical systems, medical and visual equipment, pharmaceutical and diamonds.
It was published by Globes, Israel Business News – En.globes.co.il – on April 4, 2025.
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