The Trump administration announced its intention to impose a 15% tariff on Israeli exports to the United States. The announcement comes just hours ahead of U.S. President Donald Trump’s deadline for a comprehensive new tariff policy on imported goods. Trump’s overall goal is to reduce America’s large trade deficit with the rest of the world.
In April, the Trump administration announced it would impose a 17% tariff on Israeli exports .
Israel is an export-driven economy, and the United States remains one of Israel’s largest and most important trading partners. Ron Tomer, president of the Manufacturers Association of Israel, warned in April that the U.S. tariff policy “is expected to have a significant impact on the competitiveness of the entire economy, on the ability to attract investments, on our technological superiority, and more.”
Although the tech sector employs just over 10% of Israel’s workforce, it accounts for approximately 50% of the country’s total exports. Israeli officials cautioned that Trump’s tariff policy could cost the Israeli economy an estimated $2.3 billion annually in lost exports to the United States. They also warned that between 18,000 and 26,000 Israeli workers could face job losses as a result.
“In light of the expected serious consequences, I call on you to take all diplomatic and economic measures at your disposal to prevent the imposition of taxes,” Tomer wrote Israeli Prime Minister Benjamin Netanyahu in a letter.
Netanyahu and other Israeli officials had hoped that they would be able to convince Washington to dramatically reduce the tariffs to as low as 10%.
In late April, Israeli Economy Minister Nir Barkat announced that Israel is seeking a mutually beneficial upgraded trade agreement with the U.S.
“The Americans said, ‘Wait a minute, we want you to adopt what’s good in America is good for Israel.’ Immediately, we said, ‘Okay, this is something important for them, and we’re happy to do that.” Barkat said at the time.
However, the Trump administration’s current policy means that the tariff on Israeli exports has only been moderately reduced by 2%.
The concrete impact of the 15% tariff on Israeli exports to the United States – and on related jobs in Israel – remains uncertain.
Some Israeli officials believe the Trump administration may condition a reduction in trade tariffs on a commitment by the Israeli government to end the war against Hamas in Gaza. International pressure on Israel to halt the conflict is mounting.
However, the Israeli government has stated it will not agree to a premature ceasefire before Hamas is defeated and the remaining 50 Israeli hostages are secured. Of those, only 20 are believed to still be alive.
Since the signing of a free trade agreement in 1985, bilateral trade between the United States and Israel has grown significantly. Israel currently exports approximately $20 billion in goods to the U.S. each year, while American exports to Israel total around $13 billion – resulting in a U.S. trade deficit of roughly $7 billion.
