The USA’ 15 % tariff on imports from Israel took impact on Thursday, probably costing the nation billions of {dollars}, as a part of a sweeping regime of worldwide duties imposed by the Trump administration.
The tariffs are a setback for Israel, which had initially hoped to keep away from the tax and later sought to decrease it. The export market and tax revenues are anticipated to take a success, and the injury might worsen if US President Donald Trump follows by way of on his plan to closely tax semiconductors.
The US is Israel’s closest ally and largest single buying and selling companion. The US imported $22.2 billion of products and companies from Israel in 2024, $7.4 billion greater than it exported to the nation. The 15% tariff is similar as these levied on the European Union, South Korea and Japan.
Israel’s Finance Ministry has sought to downplay the move, noting that the 15% fee is “on the lowest stage amongst international locations which have a commerce deficit with the US,” which it stated “displays the continuing dialogue between Israel and the administration with the purpose of reaching an improved settlement.”
The tariffs are a part of a brand new American responsibility system impacting items from greater than 90 international locations. Trump argues that the tariffs are wanted to reclaim cash and respect that different international locations have taken from the US.
His critics, together with most mainstream economists, say they may wreak havoc on the worldwide economic system and largely translate into larger costs for US shoppers. They’ve already precipitated uncertainty within the US economic system, with slower progress and a current weak monthly jobs report.
“I believe the expansion goes to be unprecedented,” Trump stated Wednesday afternoon. He added that the US was “taking in lots of of billions of {dollars} in tariffs,” however he couldn’t present a particular determine for revenues as a result of “we don’t even know what the ultimate quantity is” concerning tariff charges.
US President Donald Trump (proper) meets with Prime Minister Benjamin Netanyahu within the Oval Workplace of the White Home in Washington, DC, on April 7, 2025. (SAUL LOEB / AFP)
For months, Israel has tried to combat the tariff plan, with Prime Minister Benjamin Netanyahu touring to the White Home in April to debate them. However throughout that go to, when requested about canceling the tax on Israel, Trump was noncommittal.
“Don’t neglect, we assist Israel so much,” Trump stated within the Oval Workplace on the time with Netanyahu beside him. “We give Israel $4 billion a 12 months, that’s so much.”
Talks between Israel and the US in current months aimed to cut back the speed to a baseline of 10%, however did not bear fruit. Nonetheless, the 15% fee is under the 17% that Trump had initially introduced. The Producers Affiliation of Israel had warned that the 17% tariff fee might result in a lack of jobs for as many as 26,000 Israelis.
Because it at present stands, it’s estimated that Israeli exports will take an annual hit of $2-4 billion, based on Ron Tomer, president of the affiliation.
A survey by accountant Kobi Zalicha, a companion at Moore Israel – Lion Orlitzky & Co, which companies corporations that export to the US, estimated Israel will lose greater than NIS 1 billion ($290 million) in tax income.
“A minimum of a 3rd of the exporters to the US have lowered their costs within the US to offset the hit to their competitiveness following the imposition of the tax,” the survey stated. “Whereas the discount is only some share factors, this implies a drop within the taxes they owe to Israel — that’s, a drop within the taxes they’ll pay the state.”
The anticipated results of the tariffs, he wrote, is “loss and a chunk into the revenues of the businesses.” Job losses, he stated, are “actually possible.”
Folks stroll previous the NASDAQ MarketSite in Instances Sq., New York Metropolis on April 9, 2025. (ANGELA WEISS / AFP)
Trump says he’s planning a 100% tariff on semiconductors produced by corporations positioned exterior the US. Ought to the tariffs embody pharmaceutical and semiconductor elements, 20,000 to 33,000 Israelis might lose their jobs, Tomer stated.
The influence of the at present imposed US tariffs on Israel’s tech exports, which account for 53% of the nation’s complete exports to the US, is anticipated to be restricted, as duties won’t apply to the export of companies, which make up about 70% of Israel’s tech exports. However the remaining 30% — bodily items, primarily equipment, industrial gear, and comparable items — might be affected.
Israel has a decrease fee than another international locations, which in sure circumstances have been penalized for operating afoul of Trump’s will. Imports from Taiwan, Vietnam and Bangladesh are taxed at 20%. India faces a 50% tariff, partly as a result of it’s shopping for Russian oil, opposite to US calls for, whereas Brazil faces the identical fee, apparently in part due to the prosecution of former president Jair Bolsonaro, a Trump ally.
Trump additionally just lately stated that Canada’s intention to acknowledge a Palestinian state “will make it very laborious for us to make a commerce take care of them.”
Economist Shlomo Maoz stated the 15% tariff might imply Israel bought off comparatively simple.
“In the event that they have been to tax Israel solely, we might have taken a tough hit, as a result of exporting to the US would have stopped being aggressive,” Maoz stated. “However in a actuality the place the entire world is being taxed, and the speed for some international locations is even larger, the injury to us might be comparatively small.”
