Israel officially announced today (Tuesday) the elimination of all customs duties previously imposed on imports from the United States—Israel’s largest and most important trading partner. The move was carried out under the direction of Prime Minister Benjamin Netanyahu, Finance Minister Bezalel Smotrich, and Minister of Economy and Industry Nir Barkat. Following approval by the Knesset Finance Committee and the minister’s official signature, the amendment to the Import Duties and Safeguards Order will take effect, lifting tariffs on all goods imported from the U.S.
Israel’s Most Important Trade Partner
Most U.S. Goods Already Exempt from Duties
According to government data, Israeli exports to the U.S. in 2024 totaled $17.3 billion in goods and an estimated $16.7 billion in services. Figures from the Tax Authority and the Ministry of Finance’s Chief Economist Division show that Israel collects just 42 million shekels per year in customs revenue from U.S. imports—most of it from agricultural goods.
Since the 1985 U.S.-Israel Free Trade Agreement, the vast majority—about 99%—of American imports have already been fully exempt from customs duties. This latest move affects only a small number of remaining products, primarily within the food and agricultural sectors.
While the immediate change is limited in scope, lifting the remaining tariffs could pave the way for expanding the U.S.-Israel trade agreement and deepening the strategic relationship between the two countries. It also holds promise for Israeli consumers, potentially reducing the cost of living by allowing more food and agricultural products to be imported from the U.S. without tariffs.
Smotrich: “Lowering Taxes Will Help Fight the Cost of Living”
Prime Minister Benjamin Netanyahu said of the reform: “Beyond the economic benefits for Israel’s economy and its citizens, this move will further strengthen the alliance and ties between Israel and the United States.”
Finance Minister Bezalel Smotrich added: “The current administration presents a real opportunity to shape a new strategic economic future for both countries, while reinforcing Israel’s role as a key economic partner. Lowering taxes will benefit the people of Israel, support the government’s efforts to reduce the cost of living, and increase competition in the food sector.”
