Israel announced Tuesday that it would end all tariffs, or customs duties, on U.S. imports — just one day before President Donald Trump was set to announce reciprocal tariffs in a Rose Garden ceremony dubbed “Liberation Day.”
A joint statement by the Prime Minister’s Office, Finance Ministry and Economy and Industry Ministry said:
At the directive of Prime Minister Benjamin Netanyahu, Finance Minister Bezalel Smotrich and Economy and Industry Minister Nir Barkat, Israel has cancelled all of the customs duties that have been levied until now on products from the US, Israel’s largest trading partner.
After the approval of the Knesset Finance Committee and the Economy and Industry Minister’s signature on the order, the amendment to the order regarding trade levies and protective measure will take effect and customs duties on all imports from the US will be cancelled.
The US is Israel’s closest ally and its most significant trading partner. In 2024, the export of goods to the US stood at $17.3 billion, while the export of services was estimated at $16.7 billion.
The 1985 free trade agreement with the US has led to the fact that the overwhelming majority (approximately 99%) of goods imported from the US are already fully exempt from customs duties. Therefore, the reduction in customs duties will begin on a very limited number of products, in the category of imported food and agricultural products from the US.
The reduction in customs duties will, in effect, expand the US-Israel trade agreement and strengthen bilateral strategic relations. The reduction also entails an assurance to Israeli consumers in the form of a possible reduction in the cost of living with the anticipated expansion in imports of food and agricultural products from the US, which will benefit from a zero customs rate.
Israeli Prime Minister Benjamin Netanyahu also said (translated from Hebrew by the Government Press Office):
Cancelling the customs duties on American goods is an additional step in the policy that my governments have led for a decade in opening up the market to competition, introducing variety to the economy and lowering the cost of living. In addition to the economic advantages to the market and to the citizens of Israel, the current effort will allow us to further strengthen the alliance and ties between Israel and the US. We will continue to work to reduce barriers and customs, and bolster our special relationship with the US.
Finance minister Smotrich — a frequent target of Democrats and the left due to his right-wing views — added (translated from Hebrew by the Government Press Office):
The current administration is a genuine opportunity to fashion a new strategic economic future for the countries by strengthening Israel’s central role as an economic partner. I ascribe great importance to deepening the economic cooperation, advancing innovation and strengthening the financial and commercial ties between the countries, as was recently declared by the US Treasury Department and the Israeli Finance Ministry. Lowering the customs duties will be good for the State of Israel and is in line with the Government’s policy on fighting the cost of living and will even increase competition in the food sector.
Economy and Industry Minister Barkat said (translated from Hebrew by the Government Press Office):
We are continuing to strengthen the Israeli economy and the strategic ties between the countries. Cancelling the customs duties on imports from the US is a complementary step to the commercial relationship between the countries that have shared a trade agreement for many years, and which will advance additional economic cooperation in the future and lead to a reduction on imported products. We will continue to work together to open new markets and create economic opportunities that will strengthen both the Israeli economy and the strong partnership with the US, while safeguarding local products.
President Trump has stressed that the U.S. is tired of helping other countries, only to be hit with tariffs and non-tariff barriers to trade by those countries. He has threatened reciprocal tariffs to restore parity, as well as across-the-board tariffs.
Israel’s decision, announced on the eve of “Liberation Day,” shows that the Israeli government has received the message — and will likely please the White House, as it will reinforce the point Trump has been making.
