Poor Netanyahu but not poor Israelis.
Israel’s government has said it will cancel all remaining tariffs on American imports, in an apparent bid to ensure that it is exempt from a new wave of levies that President Trump is set to announce on Wednesday.
Israel and the United States, two close allies, have had a free-trade agreement since 1985 that excludes most American products from Israeli tariffs. On Tuesday, Prime Minister Benjamin Netanyahu of Israel presented the decision to remove all remaining tariffs as a move toward greater trade liberalization.
This is from Matthew Mpoke Bigg, “On Eve of Trump’s Tariffs Announcement, Israel Says It Will Lift All Duties on U.S. Imports,” New York Times, April 2, 2025.
Poor Benjamin Netnayahu. He clearly must have thought that when Donald Trump said he wanted reciprocal tariffs, Donald Trump must have wanted reciprocal tariffs. What Netenyahu didn’t understand is that Trump doesn’t want reciprocal tariffs. Instead, he wants to impose high tariffs on products from most countries no matter the tariff policy of the particular country.
There is one bright spot. Having zero tariffs on all imports from the United States is a good move that will benefit most Israelis and cause their real GDP to be slightly higher. It would be even better for most Israelis if Netanyahu were to cut tariffs on all imports to zero.
