Israel seeks to upgrade trade deal with US amid tariff dispute

Israel is proposing an upgrade to its free trade agreement with the United States, Israeli Economy Minister Nir Barkat said on Monday.

The proposed deal would ease restrictions on data sharing, paving the way for deeper cooperation between the two allies. Speaking at a conference in Jerusalem, Barkat said Israel had already agreed to several U.S. requests, including lifting tariffs on American agricultural products – though most are already exempt under the existing 1985 agreement.

Israel made a similar concession to the European Union last year, a move dubbed "What’s Good for Europe is Good for Israel."

According to Barkat, “The Americans said, ‘Wait a minute, we want you to adopt what’s good in America is good for Israel.’ Immediately, we said, ‘Okay, this is something important for them, and we’re happy to do that.’”

Earlier this month, the administration of U.S. President Donald Trump announced sweeping global tariffs, initially imposing a 17% duty on Israeli imports. That figure was later revised to a 10% baseline tariff for a 90-day grace period to allow for negotiations.

Israel’s proposal aims to make that grace period permanent, avoiding further pressure on an economy already strained by 18 months of war on multiple fronts.

Just days before the tariffs were unveiled, Israeli Prime Minister Benjamin Netanyahu met with President Trump in Washington to discuss the tariffs, nuclear talks with Iran, and ongoing hostage negotiations. During the meeting, Netanyahu pledged to eliminate all remaining import taxes on U.S. goods.

Last Tuesday, the two leaders spoke again by phone. “The call went very well – we are on the same side of every issue,” Trump posted on his Truth Social account, though he offered no further details.

The United States is Israel's largest trading partner, with bilateral trade totaling an estimated $37 billion in 2024. That year, Israel posted a $7.4 billion trade surplus with the U.S., according to U.S. trade reports.