Israel Removes All Remaining Tariffs on US Imports

In a major step to strengthen economic ties with the United States, Israeli Finance Minister Bezalel Smotrich signed an order to eliminate the last remaining tariffs on American goods, completing the full implementation of the 1985 U.S.-Israel Free Trade Agreement. The decision, coordinated with Prime Minister Benjamin Netanyahu, removes approximately $11.3 million in annual tariffs primarily in the agricultural sector.

The order now awaits final approval from the Knesset Finance Committee. Once enacted, 100% of U.S. products imported into Israel will be tariff-free.

“Most U.S. products imported into Israel are already exempt from tariffs, and today we approved the removal of the remaining tariffs on all American goods entering Israel,” Smotrich announced. He praised the move as a catalyst for lowering the cost of living, boosting food sector competition, and reinforcing the United States as Israel’s key economic partner.

This move comes just ahead of former U.S. President Donald Trump’s anticipated “Liberation Day” announcement, which is expected to include a new “country-based” tariff policy aimed at revamping global trade. The timing signals Israel’s alignment with upcoming American economic priorities.

Smotrich noted that the current U.S. administration presents “a real opportunity to reshape the strategic economic relationship between our countries,” and highlighted the move’s role in driving innovation and deeper cooperation.

Though the elimination of tariffs may increase competition for local Israeli farmers, Agriculture and Food Security Minister Avi Dichter’s office assured the public that the ministry will offer compensation if Trump’s policies negatively impact domestic producers.

Last month, Smotrich met with U.S. Treasury Secretary Scott Bessent in what was described as a “highly impactful meeting.” The dialogue focused on economic collaboration and marked a new chapter in U.S.-Israel financial relations especially given the prior administration’s distance from Smotrich over ideological concerns.

With this decision, Israel not only completes a decades-long economic transition but signals a renewed commitment to its most critical international alliance.

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