Israeli industry association warns US tariffs could cost $2.3 billion annually in export losses

The Manufacturers Association of Israel warned on Sunday that U.S. President Donald Trump’s 17% tariffs could potentially cost Israeli exporters some $2.3 billion annually in lost exports to the U.S. market. If left unchanged, Trump’s new trade policy could also jeopardize the jobs of between 18,000 and 26,000 Israelis who rely on continued exports to the large U.S. market. 

Ron Tomer, president of the Manufacturers Association of Israel, warned in a letter to Prime Minister Benjamin Netanyahu that the financial cost caused by Washington’s tariffs “is expected to have a significant impact on the competitiveness of the entire economy, on the ability to attract investments, on our technological superiority and more.” 

Tomer further expressed concerns that if the U.S. imposes tariffs on additional industries, it “will also directly harm the export of software services, and related services in Israeli high-tech.” A worst-case scenario could potentially cost the Israeli economy $3 billion in lost exports due to the highly integrated and export-oriented nature of its industries.

Tomer urged Netanyahu to do everything in his power to prevent the implementation of the U.S. tariffs on Israeli goods. 

“In light of the expected serious consequences, I call on you to take all diplomatic and economic measures at your disposal to prevent the imposition of taxes,” the senior official wrote to the prime minister.

“Through decisive and rapid action, it will be possible to prevent serious harm to the Israeli economy.” 

The warning from the Manufacturers Association came just hours ahead of Netanyahu’s trip to the U.S., where he was scheduled to meet Trump and other top U.S. officials. 

Ahead of his trip to the U.S., Netanyahu told media representatives in Hungary that the tariff issue was among his top priorities to be discussed with the U.S. president. 

“From here, I am departing for the US, at the invitation of President Trump, to talk with him, of course, about these issues: The hostages, achieving victory in Gaza and, of course, the tariff regime that has been imposed on Israel. I hope that I will be able to help on this issue. That is the intention,” Netanyahu announced. 

The prime minister further noted that he would be the first international leader to discuss the tariff issue with Trump. 

“I can tell you that I am the first international leader, the first foreign leader, who will meet with President Trump on the issue, which is so important to the Israeli economy.” 

“There is a long line of leaders who want to do this regarding their economies. I think that it reflects the special personal link, as well as the special ties between the US and Israel, which is so vital at this time,” Netanyahu added. 

Last week, Israel canceled all the remaining import taxes on U.S. goods ahead of Trump’s expected new global tariff policy. Despite Trump’s assurances that his policy is based on reciprocity, Israel was not spared in the U.S. president’s decision to impose sweeping tariffs on imported goods from numerous countries. 

In 2024, the United States imported goods from Israel worth more than $13.5 billion, making it the Jewish state’s largest single trade partner worldwide. The Tel Aviv Stock Exchange (TASE) benchmark TA-125 index fell by 3.8% on Sunday after slipping 0.4% earlier in the week as a result of the U.S. tariffs on Israeli goods. 

“The tariff plan presented by Trump, which was published on Wednesday evening, led to declines on Thursday on all world markets, including Israel,” TASE stated. “In addition, trading in the domestic market was characterized by volatility against the backdrop of the return to fighting in Gaza and internal political developments.”