Trump's trade wars: Israel unilaterally cancels tariffs on US goods

To preempt President Donald Trump's planned announcement of tariff hikes against countries around the world, Israel has now officially passed a complete repeal of tariffs on all American goods today (Tuesday).

According to the government's official statement:

"Under the direction of Prime Minister Benjamin Netanyahu; Finance Minister Bezalel Smotrich; and Minister of Economy and Industry, MK Nir Barkat; Israel has canceled all tariffs previously imposed on products from the United States, Israel's largest trading partner.

"Following approval by the Finance Committee and the signing of the order by the Minister of Economy and Industry, the amendment to the Trade Levies and Protective Measures Order will take effect, and all tariffs on imports from the United States will be canceled."

The government then explained the rationale behind the decison: "The United States is Israel's closest ally and also its most significant trading partner. In 2024, goods exports to the United States amounted to $17.3 billion, and services exports were estimated at $16.7 billion.

"The Free Trade Agreement between Israel and the United States from 1985 resulted in the vast majority (approximately 99%) of products imported from the United States already being fully exempt from tariffs. 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 lead to an expansion of the Israel-United States 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 tariff rate."

Not everyone was pleased with this decision. Representatives of Israel's farming sector, a highly influential voting bloc with a disproportionate presence along Israel's borders decried the decision in a statement released shortly after the repeal of the tariffs.

The chairman of the Israel Farmers Federation and Secretary-General of the Moshav Movement, Amit Yifrach, and the Secretary-General of the Israel Farmers Federation, Uri Dorman, said that: "This is a step that will bring disaster to local agriculture and to the food security of Israeli citizens. Especially today, after October 7th, we must internalize the importance of agriculture down to the last furrow and strengthen the farmers who live near the border."

Farmers' representatives further added that: "The entry of agricultural produce without tariffs will cause significant damage to Israeli agriculture in general, and to communities near the border in particular. Farmers will experience an additional and even more severe blow to their livelihood, which will lead to abandonment of settlements on the country's borders. There is no doubt that trade relations with the USA are important and worthy, however, we must ensure that we do not throw the baby out with the bathwater, and harm food security and national security."