Trump’s tariffs may cost Israeli economy billions

The Israel Manufacturers Association has warned that the 17% tariff imposed by US President Donald Trump on Israeli products could deal a $2.3 billion blow to the Israeli economy, potentially causing between 18,000 and 26,000 job losses.

This warning came hours before Israeli Prime Minister Benjamin Netanyahu’s departure to Washington.

While Israel had hoped to avoid the tariffs announced by Trump, it removed all taxes on goods imported from the US last week. However, it still faces a 17% tariff from the US.

According to The Times of Israel, Israel Manufacturers Association President Dr. Ron Tomer, in a letter to Netanyahu, requested an urgent initiative with the Trump administration to remove these tariffs by using all possible means.

According to the analysis published by the association and presented to Netanyahu, if the tariff remains at 17%, Israel’s exports will suffer a $2.3 billion loss, and between 18,000 and 26,000 Israelis will be at risk of losing their jobs.

The association also warned that if Trump expands the tariffs to include the pharmaceutical and chip sectors, which have not yet been affected, the damage to Israel’s exports could reach $3 billion.

The areas expected to be most affected include biotechnology, plastics, metals, chemicals and fuels, and high technology, including robotics and electronic components.

The US is Israel’s largest trading partner. In 2024, the US imported over $13.5 billion worth of products from Israel.

Tomer stated in his letter that the tariffs could negatively impact Israel’s overall economic competitiveness, its capacity to attract investment, and its technological superiority. In a worse-case scenario, taxes on electronic products could also directly and negatively affect the export of software and IT services, he warned.

“In light of the expected serious consequences, the government needs to prevent the implementation of these tariffs by using all the diplomatic and economic tools at its disposal,” said Tomer, arguing that the damage to the Israeli economy could be prevented with decisive and rapid steps.