Israel Acts to Avert Tariffs
In April 2025, Israel moved to neutralize the impact of upcoming U.S. tariffs by removing its remaining import duties on American products. Finance Minister Bezalel Smotrich, in coordination with Prime Minister Benjamin Netanyahu, signed an emergency order eliminating tariffs on goods such as wine and potatoes.
The goal was to bolster U.S.-Israel economic relations and potentially secure an exemption from a proposed 17% U.S. tariff on Israeli exports.
The decision aligned with the principles of the 1985 U.S.–Israel Free Trade Agreement and aimed to demonstrate Israel’s commitment to open trade and reduced consumer costs.
However, the move drew criticism from domestic agricultural groups worried about competition. The Knesset Finance Committee was expected to approve the measure during its recess to ensure swift implementation.
Israel’s policy response underscores its strategic intent to maintain a stable trade alliance with the United States amid evolving global economic pressures.
Read more in Globes: https://en.globes.co.il/en/article-israel-formulates-measures-to-cut-planned-us-tariff-1001508202
Meanwhile, an article in the TOI says that Israeli tech companies with operations in the United States remain mostly untouched by former President Donald Trump’s latest round of tariffs, as their core focus on software exempts them from the new duties.
However, these firms could still experience indirect pressure. Increased tariffs on hardware components—such as servers and sensors sourced from Asia—may drive up R&D expenses.
Cloud providers like Amazon Web Services and Google Cloud may also pass along higher costs stemming from their own tariff burdens, potentially raising operating expenses for Israeli startups reliant on these platforms.
While the immediate impact remains limited, the broader ripple effects of the U.S.
tariff policy could alter cost structures and investment decisions for Israeli tech firms scaling in the American market. Read more on this in The Times of Israel: https://www.timesofisrael.com/israeli-tech-firms-in-us-spared-the-worst-of-trump-tariffs-insiders-say/?utm_source=Startup+Daily&utm_campaign=startup-daily-2025-04-20&utm_medium=email.
