Prime Minister Benjamin Netanyahu does not appear to have persuaded US President Donald Trump to exempt Israel from his new tariffs policy at their meeting at the White House yesterday. The tariffs are due to come into force this week. The baseline tariff on imports into the US is 10%. The tariff imposed on imports from Israel is 17%.
At Israel’s Ministry of Finance, the expectation was that Netanyahu would try to persuade Trump to exclude Israel entirely from the new policy, but the US president would not commit to doing so. Asked about whether Israel would be granted an exemption, he said, “Maybe not. Don’t forget we help Israel a lot. We give Israel $4 billion a year. That’s a lot,” referring to US military aid to Israel.
“We’ve been ripped off and taken advantage of by many countries over the years, and can’t do it anymore,” Trump added.
According to Israel’s Central Bureau of Statistics, in 2024, Israeli exports of goods to the US (including diamonds) were worth $17.2 billion, while imports from the US were worth $9.2 billion. Israel’s trade surplus with the US is the largest it has with any country, by a long way. With China, Israel had a trade deficit in goods in 2024 of $10.8 billion.
For his part, Netanyahu promised to remove all tariffs and other trade barriers facing US exports to Israel. “We intend to do it very quickly,” Netanyahu said concerning cancelation of tariffs, adding, “We think it’s the right thing to do, and we’re going to also eliminate trade barriers.” Netanyahu was accompanied on his visit to Washington, the first by a foreign leader after the announcement of the tariffs policy, by his economic adviser Prof. Avi Simhon, but not by representatives of the Ministry of Finance. He met Secretary of Commerce Howard Lutnick and US Trade Representative Jamieson Greer before his meeting with Trump.
Israel’s Ministry of Finance announced these moves last week, in the hope of averting US tariffs on Israel, but without success. The “What’s good for Europe is good for Israel” reform, which angered the US administration, has been updated such that products that meet US standards will automatically be approved for import into Israel. The significance of this is more declarative than practical, since almost all US products for export are adapted to European standards, so that they were able to be imported into Israel even under the original reform.
In addition, Minister of Finance Bezalel Smotrich signed an order cancelling Israeli tariffs on imports from the US. The order requires approval from the Knesset Finance Committee. Tariffs on US goods are in any case negligible, and amount to some NIS 42 million annually. The relevant tariffs are mainly on agricultural produce.
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In its interest rate announcement yesterday, the Bank of Israel stated: “Exports of goods to the US, which constitute about 13% of total exports of goods and services, will be significantly affected by the tariffs imposed by the US government, and in addition, the other export components will be adversely affected by the damage to world trade.”
On the diplomatic front, Trump stated that direct, high-level talks would begin between the US and Iran this Saturday, with the aim of reaching an agreement on Iran’s nuclear program. “We’re having direct talks with Iran, and they’ve started. It’ll go on Saturday. We have a very big meeting, and we’ll see what can happen,” Trump said, adding that Tehran will be “in great danger” should the talks fail. Iranian Foreign Minister Abbas Araghchi has meanwhile stated that talks will indeed take place, but that they will be in Oman, and will be indirect.
Published by Globes, Israel business news – en.globes.co.il – on April 8, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
