Israel has signaled interest in eliminating its trade deficit with the US.
On Monday, Israeli Prime Minister Benjamin Netanyahu was the first foreign leader to meet in person with President Donald Trump since the White House announced a new round of substantial tariffs last week and sent global markets into a tailspin. Trump’s plan included a baseline 10% tariff on all countries and higher tariffs on countries the White House considered “the worst offenders” in US trade relations. Israel, one of the US’s major non-NATO allies, faces a 17% tariff.
“We will eliminate the trade deficit with the United States,” Netanyahu told reporters in the Oval Office following a private meeting with Trump. “We intend to do it very quickly. We think it’s the right thing to do. And we’re going to also eliminate trade barriers.”
“Israel can serve as a model for many countries who ought to do the same,” Netanyahu said, adding, “I’m a free-trade champion, and free trade has to be fair trade.”
In 2024, the US exported $14.8 billion worth of goods to Israel and imported $22.2 billion worth of goods from Israel, totaling a $7.4 billion goods trade deficit for the year, an 8.6% increase from 2023, according to US trade data.
In 2023, the three main goods that Israel exported to the US were diamonds, integrated circuits (also known as microchips), and broadcasting equipment, according to the Observatory of Economic Complexity.
In turn, the biggest products the US exported to Israel the same year were diamonds, explosive ammunition, and packaged medicaments (essentially retail pharmaceutical products), according to data compiled by OEC.
For his part, Trump told reporters during the appearance with Netanyahu that the US will “maybe not” reduce its tariffs against Israel.
“Well, we’re talking about a whole new trade — maybe not, maybe not. Now, don’t forget we help Israel a lot. You know, we give Israel $4 billion a year. That’s a lot,” Trump said, referring to the military assistance the US sends to Israel.
The US and Israel have had a free-trade agreement in place since 1985, and the US is Israel’s single largest trading partner.
Last week, in what may have been an effort to avoid new tariffs from Trump, Netanyahu wrote in a post on X — just one day before Trump’s “Liberation Day” tariff announcement — that he would be eliminating all remaining tariffs on American goods.
Netanyahu said after the meeting with Trump that Israel would also work to “eliminate trade barriers” between the two countries.
