Following instructions from Israeli Prime Minister Bibi Netanyahu, Israel has officially eliminated all existing import tariffs on goods arriving from the United States—its largest trade ally—thanks to joint efforts by Finance Minister Bezalel Smotrich and Economy and Industry Minister Nir Barkat.
With the green light from the Knesset Finance Committee and the formal signing of the new trade directive by Minister Barkat, an updated amendment concerning tariffs and protective trade measures will now take effect, completely removing customs duties on all American imports into Israel.
A statement from the Government Press Office highlighted the significance of this move, noting, “The US is Israel’s closest ally and its most significant trading partner. In 2024, the export of goods to the US stood at $17.3 billion, while the export of services was estimated at $16.7 billion.”
Although most U.S. goods entering Israel—around 99%—are already exempt from tariffs under the 1985 Free Trade Agreement, the remaining duties were largely focused on select agricultural and food items. “The 1985 free trade agreement with the US has led to the fact that the overwhelming majority (approximately 99%) of goods imported from the US are already fully exempt from customs duties. Therefore, the reduction in customs duties will begin on a very limited number of products, in the category of imported food and agricultural products from the US.”
The GPO further stated that this policy shift broadens the existing trade framework with the United States and reinforces the strategic partnership between the two nations. “The reduction in customs duties will, in effect, expand the US-Israel trade agreement and strengthen bilateral strategic relations. The reduction also entails an assurance to Israeli consumers in the form of a possible reduction in the cost of living with the anticipated expansion in imports of food and agricultural products from the US, which will benefit from a zero customs rate,” the GPO stated.
Prime Minister Netanyahu emphasized that this decision is part of a broader economic philosophy that his administrations have promoted over the years. “Cancelling the customs duties on American goods is an additional step in the policy that my governments have led for a decade in opening up the market to competition, introducing variety to the economy and lowering the cost of living. In addition to the economic advantages to the market and to the citizens of Israel, the current effort will allow us to further strengthen the alliance and ties between Israel and the US. We will continue to work to reduce barriers and customs, and bolster our special relationship with the US.”
Finance Minister Smotrich underscored the strategic value of the change, viewing it as an opportunity to deepen bilateral economic collaboration. “The current administration is a genuine opportunity to fashion a new strategic economic future for the countries by strengthening Israel’s central role as an economic partner. I ascribe great importance to deepening the economic cooperation, advancing innovation and strengthening the financial and commercial ties between the countries, as was recently declared by the US Treasury Department and the Israeli Finance Ministry. Lowering the customs duties will be good for the State of Israel and is in line with the Government’s policy on fighting the cost of living and will even increase competition in the food sector.”
Minister Barkat also emphasized the long-standing trade alliance between Israel and the United States, adding that this latest move is a natural next step in an already thriving economic relationship. “We are continuing to strengthen the Israeli economy and the strategic ties between the countries. Cancelling the customs duties on imports from the US is a complementary step to the commercial relationship between the countries that have shared a trade agreement for many years, and which will advance additional economic cooperation in the future and lead to a reduction on imported products. We will continue to work together to open new markets and create economic opportunities that will strengthen both the Israeli economy and the strong partnership with the US, while safeguarding local products.”
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