Israel’s Big Trade Win: New US Deal Slashes Tariffs in Days
Israel expects to announce a new trade agreement with the US, reducing tariffs on its exports from 17% to just above 10%, with negotiations nearing completion. The deal, resolving agricultural disputes and promising further tariff cuts, positions Israel favourably in a global race to avoid high US tariffs.
Israel is poised to announce a new trade agreement with the United States in the coming days, a significant step toward easing the burden of tariffs imposed by President Donald Trump in April 2025. The deal, expected to lower tariffs on Israeli exports from 17% to just above the 10% base rate applied to all US trading partners, marks a breakthrough after months of negotiations led by Israel’s Ministry of Economy’s Foreign Trade Administration. Yifat Alon Perel, head of Israel’s negotiation team, described the agreement’s framework, stating, “We’ve reached agreements on tariffs for fresh and processed agricultural products, with a separate deal to be signed for these, while the broader agreement is in its final stages.” The deal, set to enhance Israeli exports’ access to the US market, positions Israel ahead of many nations racing to secure trade pacts before Trump’s extended August 1, 2025, tariff deadline.
Negotiations, initiated in March, resolved key disputes, particularly over agricultural products, which account for $1.2 billion of Israel’s $20 billion annual exports to the US, including citrus, olives, and processed foods. Perel emphasized, “The emerging agreement will provide Israeli exports with preferential access compared to other countries.” While the base 10% tariff remains a firm US policy, Israel expects further reductions through ongoing talks over the next few months, aiming for a comprehensive, permanent deal. A senior official confirmed, “Negotiations are progressing smoothly with no significant disputes, and Israel expects to face relatively low tariffs.” During an April 2025 White House visit, Prime Minister Benjamin Netanyahu addressed the trade deficit, stating, “I recognize the United States’ position; we aim to eliminate the trade deficit quickly and hope to reach a solution very soon.”
The agreement follows Trump’s April “Liberation Day” tariffs, which shook global markets with rates up to 50% on countries like Brazil. Israel’s proactive diplomacy, including Netanyahu’s pledge to reduce the $2.5 billion trade deficit (2024 data), has positioned it among the first nations, alongside the UK and Vietnam, to near a deal. Social media posts on X reflect optimism, with one user noting, “Lower tariffs will boost Israel’s tech and agriculture exports, huge win!” However, global economists warn Trump’s tariff strategy could disrupt economies, with the IMF estimating a potential 1.2% global GDP drop by 2026. Israel’s success in securing favorable terms underscores its strategic economic alignment with the US, its largest trading partner, amid a volatile global trade landscape.