Jerusalem, April 2: In a significant economic move, Israel has officially eliminated all customs duties on imports from the United States, its largest trading partner. The directive, issued by Prime Minister Benjamin Netanyahu, was executed by Finance Minister Bezalel Smotrich and Economy and Industry Minister Nir Barkat, marking a new phase in US-Israel economic ties.
US-Israel Free Trade Agreement Expanded
With the approval of the Knesset Finance Committee and the necessary ministerial signatures, the amendment to Israel’s trade levy order will now take effect. The move strengthens the 1985 US-Israel Free Trade Agreement, which already ensured 99% of US goods entered Israel tariff-free. The latest decision removes tariffs on the remaining 1%, primarily affecting food and agricultural imports.
Why Is Israel Removing Tariffs?
Israel’s government has outlined two major reasons behind this decision:
- Enhanced Trade Relations – By further reducing trade barriers, Israel and the US reinforce their strategic economic alliance.
- Lower Cost of Living – The removal of customs duties on US food and agricultural imports is expected to increase supply and reduce consumer prices in Israel.
Economic Impact: Strengthening Bilateral Trade
- The US remains Israel’s top trade partner, with total exports to the US reaching $34 billion in 2024 ($17.3 billion in goods and $16.7 billion in services).
- The decision boosts bilateral economic cooperation, making it easier for American companies to export goods to Israel.
- Israeli consumers could benefit from lower prices on imported American products, particularly in the food and agriculture sectors.
Official Statement from Israeli Authorities
In a joint statement, the Prime Minister’s Office, Finance Ministry, and Economy and Industry Ministry confirmed that the removal of customs duties would “expand the US-Israel trade agreement and strengthen bilateral strategic relations.”
