Israel Eliminates Tariffs on U.S. Imports Ahead of Potential Trump Tariffs

Israeli Finance Minister Bezalel Smotrich announced and signed a plan to eliminate all remaining tariffs on U.S. imports. The move precedes a potential announcement from Donald Trump regarding new duties on foreign products. Israel and the U.S. have a free trade agreement since 1985, exempting approximately 98% of American products from Israeli tariffs. According to U.S. trade data, total U.S. trade with Israel amounted to an estimated $37 billion in 2024, with the U.S. bilateral deficit at $7.4 billion, an 8.6 percent increase over the previous year. Israeli import taxes on U.S. goods amount to $11.3 million annually, primarily levied on food. Netanyahu stated that canceling customs duties on American goods is an additional step in opening up the market to competition. The lifting of tariffs on U.S. goods requires Knesset approval. Smotrich anticipates that Trump will reciprocate by lowering trade barriers to Israeli goods. The U.S. imports Israeli commodities such as stone, metals, glass, industrial machinery, chemicals, plastics, and rubber.