Israel cancels remaining import taxes on US goods ahead of Trump’s expected announcement of new tariffs

With U.S. President Donald Trump expected to announce a new series of tariffs on Wednesday,  the Israeli government on Tuesday evening announced the cancelling of all remaining tariffs on U.S. imports. 

The move appears to be an attempt to ensure that Israel is exempt from any new levies. 

While the U.S. and Israel have had a free-trade agreement since 1985, there were still a few remaining tariffs until the announcement on Tuesday. 

Prime Minister Benjamin Netanyahu posted an announcement to 𝕏, as well as an official announcement through the Prime Minister’s Office, celebrating the move to bring variety to the market and lower the cost of living. 

At the directive of Prime Minister Netanyahu, Finance Minister Smotrich and Economy & Industry Minister 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.https://t.co/PflP3tKOVJ

— Prime Minister of Israel (@IsraeliPM) April 1, 2025

“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,” Netanyahu’s office posted to 𝕏.

“In addition to the advantages to the market and to 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.”

U.S. Senator Ted Cruz responded: "Excellent!"

The directive came from Prime Minister Benjamin Netanyahu, Finance Minister Bezalel Smotrich, and Economy and Industry Minister Nir Barkat, and is still subject to final approval by the Knesset Finance Committee. 

Smotrich appeared to admit that the move came to protect Israel from increased tariffs following Trump’s expected announcement on Wednesday. 

“Fully eliminating tariffs on imports from the US is an important step to safeguard the Israeli economy during a sensitive period and to strengthen the economic relationship with our most important ally – the US,” Smotrich said on Tuesday.

“We will continue to act decisively to protect Israeli exports and preserve the competitive advantages of Israel in the international arena.”

The government said the 1985 free trade agreement with the U.S. has led to approximately 99% of goods imported from the U.S. already being exempt from customs duties. The reduction in customs duties will apply to a limited number of products, mostly imported food and agricultural products. 

Minister Smotrich also said that "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.” 

Most of the import taxes on U.S. goods into Israel came from food, according to the Finance Ministry, and experts say that Israel will likely have to come up with creative ways to protect local agricultural products from being negatively impacted by the lower prices on U.S. goods. 

The Trump administration is attempting to rebalance what it sees as a trade imbalance which has negatively affected U.S. consumers. Trump is expected to announce new tariffs on adversaries as well as traditional allies, prompting Israel to take a preemptive step to stay on good terms with its ally.