Israel Cancels All Tariffs on US Goods

Under the guidance of Prime Minister Benjamin Netanyahu, Finance Minister Bezalel Smotrich, and Minister of Economy and Industry, Nir Barkat, Israel has abolished all tariffs imposed to date on products from the United States, Israel's major trading partner.

Following the approval of the Finance Committee and the signature of the Minister of Economy and Industry on the order, the amendment to the Trade and Defense Levy Order will come into effect, and tariffs on all imports from the United States will be abolished.

The United States is Israel's closest ally and its most significant trading partner. In 2024, goods exports to the United States stood at $17.3 billion, and services exports were estimated at $16.7 billion.

The 1985 Free Trade Agreement (FTA) between Israel and the United States has resulted in the vast majority (about 99%) of products imported from the United States being fully exempt from customs duties. Therefore, the tariff reduction will apply to a very limited number of products, in the category of food and agricultural imports from the United States.

The tariff reduction will effectively expand the Israel-US trade agreement and strengthen the strategic relations between the countries. The reduction also holds a promise for consumers in Israel in the form of a possible reduction in the cost of living with the expected expansion of food and agricultural product imports from the United States, which will enjoy a zero customs rate.

Prime Minister Benjamin Netanyahu said: 'The abolition of tariffs on American goods is another step in the policy that my governments have been leading for a decade to open the market to competition, to introduce diversity into the economy, and to reduce the cost of living. In addition to the economic benefits for the economy and the citizens of Israel, the current move will enable us to further strengthen the alliance and ties between Israel and the United States. We will continue to work to reduce barriers and tariffs, and to strengthen our special relations with the United States.'

Finance Minister Bezalel Smotrich said: 'The current government is a real opportunity to shape a new strategic economic future for the countries, while strengthening Israel's central role as an economic partner. I see great importance in deepening economic cooperation, promoting innovation, and strengthening financial and commercial ties between the countries, as recently declared by the US and Israeli Treasury Departments. The tax reduction will benefit the State of Israel and goes hand in hand with the government's policy in the fight against the cost of living and will even increase competition in the food sector.'

Minister of Economy and Industry, Nir Barkat, said: 'We continue to strengthen the Israeli economy and the strategic ties between the countries. The abolition of tariffs on imports from the United States is a complementary step to the trade relations between the countries that share a long-standing trade agreement that will promote additional economic collaborations in the future and lead to a reduction of imported products. We will continue to work together to open new markets and create economic opportunities that will strengthen the Israeli economy and the strong partnership with the United States, while preserving local produce.'

The President of the Manufacturers Association, Dr. Ron Tomer, believes that Israel will be exempted from Trump's new tariffs. 'The Israeli export is expected to actually benefit from Trump's new tariff policy, as due to the free trade agreement, it is likely that Israel will be exempted from the new tariffs and will be one of the only countries whose exports will not be subject to tariffs in the US.'