Netanyahu Vows to End Trade Deficit with US to Avoid Trump Tariffs

Israeli Prime Minister Benjamin Netanyahu announced this week that Israel will swiftly eliminate its trade deficit with America. The statement comes just days before a 17% tariff on Israeli goods is set to take effect under President Donald Trump’s assertive new trade policy.

“We intend to do it very quickly,” Netanyahu said, calling himself a “free trade champion” and pledging to knock down existing trade barriers that he says have been “put up unnecessarily.” The announcement follows intense discussions in Washington, including Netanyahu’s second visit to the White House in less than three months.

The Trump administration’s new tariffs, dubbed “Liberation Day” tariffs, are reshaping the global trade landscape. While a 10% baseline tariff is hitting all countries, Israel is facing a steeper 17% rate due to its growing trade imbalance with the U.S. The numbers tell the story:

• Israel exported $22.2 billion to the U.S. in 2024, but imported only $14.8 billion worth of American goods.

• That leaves a $7.4 billion trade deficit one of the higher gaps among U.S. allies.

• The United States is Israel’s largest trading partner, with bilateral goods trade expected to hit $37 billion this year.

For years, the U.S.-Israel Free Trade Agreement kept tariffs virtually nonexistent. But under Trump’s America First economic doctrine, deficits now have consequences. According to a senior White House official, the new tariffs are based on each country’s trade deficit divided by total imports and they also factor in other barriers such as intellectual property theft, something the U.S. says has occurred with Israel in specific sectors.

Trump’s tariff strategy isn’t just directed at adversaries it’s a message to allies who’ve grown too comfortable. And it’s working. Over 50 countries have reached out to the administration to renegotiate trade deals since the policy was unveiled.

Netanyahu’s whirlwind trip to D.C. included meetings with Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer. By all accounts, they were “warm, friendly and productive.” But there’s no mistaking the pressure Israel is under. Amidst a costly war and economic strain, a hefty tariff could deal a blow to an already struggling economy.

Meanwhile, Trump isn’t slowing down. His conversation with Netanyahu also touched on the 59 hostages still held by Hamas, Turkish influence in Syria, and quiet diplomacy with Iran over its nuclear ambitions. On the global stage, Trump is showing that America won’t tolerate being taken advantage of not even by allies.

While Joe Biden’s administration has spent years appeasing foreign governments and watching America’s economic leverage erode, Trump is once again proving that strength wins respect. Netanyahu’s pledge shows that even close allies are feeling the heat and adjusting quickly.

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