US to ease tariffs on defense and diamond imports from Israel

The Trump administration will soon publish the final list of tariffs on goods imported into the US. The general tariff rate imposed on goods from Israel will not change from the previous phase of the US tariff plan, which has already entered into force and stands at 15%. However, the announcement will include exceptions and lower tariffs for products from certain sectors.

Products on which advanced negotiations for cuts in US tariffs are underway include the defense industry and diamonds. As for chips and pharma – two leading sectors in Israel’s exports – the negotiations are expected to continue for months to come. Currently, they are not included in the tariff plan at all and have a 0% tariff. But the US government is conducting trade investigations in these two sectors, so the threat still exists for Israeli manufacturers.

The Ministry of Economy and Industry, which is leading the talks with the US, rejects criticism that the general tariff rate on Israel has not dropped below 15%. “We understood that 15% is the new zero, that is, the minimum for countries that have a trade surplus with the US,” says Yifat Alon-Perel, head of the negotiating team for talks with the US, and deputy director of the Foreign Trade Administration for Trade Policy and Agreements at the Ministry of Economy and Industry.

She says, “Today we see that this is really the line with all countries in the world. Almost no country that has a trade surplus has managed to drop below 15%.”

Although the expected announcement in the coming days or weeks of tariff relief for some Israeli exports will be a milestone in the tariff negotiations, in practice the talks will not stop. Israel and the US have not yet signed a new, comprehensive trade agreement between them, which it is estimated will only be closed well into 2026.

“We hope we will succeed in obtaining additional easements” “Beyond the easements we will see in the coming weeks, I hope we will be able to achieve additional relief in the framework of the negotiations on the big agreement,” says Alon-Perel. “Israel has already come a long way toward the Americans in the reform led by Minister Nir Barkat, ‘What is good for America is good for Israel,’ which will ease the regulatory burden on imports from the US to Israel, and in the agricultural trade agreement signed last month and which guarantees zero tariffs on goods from the US that reach Israel.”

Israel has not yet given up on the possibility of receiving an across-the-board cut in the tariff rate as part of the overall agreement, but it seems that this is already reserved for agreements that go beyond the boundaries of the Ministry of Economy’s sector – more in the worlds of foreign policy and defense. This has often come up at the negotiating table with the Americans and also required the involvement of Prime Minister Benjamin Netanyahu. Israel believes that the Americans have already been granted almost every possible trade relief in the framework of the current negotiations. So further developments in the tariff plan, if any, could come from indirect directions such as Saudi Arabia or from the Gaza Strip. The understanding is that the final decision will remain in the hands of Trump himself.

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Published by Globes, Israel business news – en.globes.co.il – on December 22, 2025.

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