Calcalist newspaper has published a report revealing an increasing concern among foreign trade experts in Israel that US President Donald Trump’s commercial policies impose customs duties on Israeli products, especially in the drugs and semi -conductors sectors, which may harm Israeli exports to the United States.
According to the report, Trump is the customs duties is a major tool for restructuring the American economic system, with a focus on strengthening local industries and reducing the trade deficit. The report indicated that the free trade agreement between Israel and the United States, which entered into force in 1985 and was expanded in 1995, may not be sufficient to protect Israel from imposing new fees.
The Israeli economy is under threat
The Bank of Israel stressed that the Israeli economy is largely dependent on the services sector, as commercial services exports to the United States amounted to more than 20 billion dollars in 2021, which represents 48% of the total services exports, while the exports of industrial goods (except for diamonds) in 2024 amounted to about 14.2 billion dollars, an increase of 4.5% over 2023.
https://www.youtube.com/watch?v=n1jcrhwsnng
Nevertheless, Trump’s policies focus more on material goods than services, making Israeli industrial sectors at risk.
The Israeli commercial attaché in Washington, Yoaf Sidel, explained that Trump looks at customs duties as an effective tool in protecting the American industry, adding that “Trump aims to restore jobs to American factories, and customs duties are the best way to achieve this, especially against countries such as China, Canada and Mexico, and Israel may not exclude from this policy.”
The report indicated that during the first Trump state, his administration imposed customs duties on Israeli mineral imports, and the attempts of Israeli officials, including Prime Minister Benjamin Netanyahu, did not succeed in obtaining an exemption from these decisions.
Targeting the drug and semi -conductors sectors
According to the report, Trump intends to expand the scope of customs duties to include vital sectors such as semiconductor and pharmaceutical industries, which is a direct threat to the Israeli economy.
- Israeli drug exports to the United States amounted to two billion dollars annually.
- Semiconductor exports and electronic panels reached 6.5 billion dollars, which represents 12% of the total Israeli industrial exports.
The report emphasized that these sectors will be more affected by the new commercial policies of Trump, as Israel relies heavily on the United States market to export these products.
https://www.youtube.com/watch?v=xbcrypd-jhi
International economic institutions, such as the Boston Federal Bank and the Peterson Institute for International Economy, expected that the new tariffs will lead to high inflation rates and increase production costs globally.
Ignoring a worrying government
Despite the repeated warnings of trade and economists, the report indicates that the Israeli government ignores the potential risks and bets on Trump’s close relationship with Israel to avoid imposing these fees.
But economic data indicates that the trade deficit between the United States and Israel increased by 30% in only 3 years, which may make Israel a target of Trump’s economic policies.
