Trump Tariffs on Israeli Goods Spark Outcry from Officials and Industry Leaders

Israeli officials and business leaders reacted with dismay on Wednesday night to U.S. President Donald Trump’s surprise decision to impose a 17% tariff on imports from Israel, calling the move a “regression” in economic relations and a blow to decades of close trade cooperation.

The sweeping tariff initiative, which includes a baseline 10% duty on all U.S. imports and elevated rates for key trading partners, stunned Israeli policymakers, especially following Israel’s own recent decision to eliminate remaining tariffs on American goods in hopes of deepening bilateral ties.

“It’s going to be hard,” Israeli officials admitted, adding they believed their goodwill gesture would prevent such action and vowed to “work to change the decision,” which they called “unjustified.”

Finance Minister Bezalel Smotrich announced that his ministry is urgently assessing the impact across various sectors in coordination with Israeli industry and economic leaders. “We are studying President Trump’s decision and its implications for the State of Israel,” Smotrich said.

Dr. Ron Tomer, President of the Manufacturers Association of Israel, said the tariffs risk damaging Israel’s economic stability and could deter foreign investment. “This is a regression in the trade and investment relationship between the countries, especially considering the long-standing and loyal friendship between the two nations,” he warned.

Tomer also questioned the rationale behind the decision, calling the claim that Israel imposes a 33% tariff on U.S. goods “puzzling.” He urged intensive negotiations to either reverse the decision or mitigate its scope.

The Israel Export Institute echoed those concerns, describing the tariffs as a “significant challenge,” especially for non-exempt industries. However, the institute noted that over 60% of Israeli exports to the U.S. are business services, which appear to be unaffected. It highlighted that pharmaceuticals and semiconductors two of Israel’s largest export sectors may also be exempt.

Trade between Israel and the United States totaled $55 billion in 2024, with Israel exporting 70% of that total. The U.S. remains Israel’s most important trading partner.

For Israel’s crucial high-tech industry, the outlook is uncertain. Karin Mayer Rubinstein, CEO of Israel Advanced Technology Industries, warned that if the tariffs apply to Software as a Service (SaaS), they could dramatically shift Israeli companies’ approach to the U.S. market. “This move could fundamentally alter how Israeli companies approach the American market and even discourage potential investors and customers,” she said.

While Israeli leaders are confident the strong U.S.-Israel alliance will ultimately weather this storm, the new tariffs represent an unexpected and jarring disruption to one of the Jewish state's most critical economic lifelines.

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