Finance Minister Bezalel Smotrich has signed a directive to eliminate all tariffs on imports from the US immediately. This move aims to prevent the imposition of reciprocal tariffs by the Trump administration. The directive was coordinated with Prime Minister Benjamin Netanyahu and Economy Minister Nir Barkat, pending approval from the Knesset Finance Committee.
1. Tariff Removal Request: Smotrich requested the removal of tariffs on US imports, especially agricultural products, ahead of anticipated US tariffs set to begin on April 2.
2. Historical Context: Israel and the US have had a free trade agreement since 1985, which phased out most tariffs on manufactured goods by 1995, but still allows some import protections, primarily to protect local agriculture.
3. Economic Impact: Smotrich emphasized that removing tariffs is crucial for Israel’s economy and maintaining strong relations with the US. The goal is to establish a zero-tariff policy.
4. Current Tariff Data: Presently, customs duties from US imports total only NIS 42 million ($11 million) annually, covering products like apples, tomatoes, and hummus.
5. Agricultural Policy Considerations: The removal of tariffs will necessitate a new agricultural policy to support local producers against potential flooding from cheaper US goods, as mentioned by Dan Catarivas, president of the Israeli Federation of Bi-National Chambers of Commerce.
6. US Trade Policy Changes: The directive is a response to shifts in US trade policies under President Trump, which could have widespread effects on Israeli agricultural exports.
Smotrich’s initiative to eliminate tariffs on US imports aims to enhance economic ties and address internal challenges like the rising cost of living. Support from the Federation of Israeli Chambers of Commerce highlights the importance of reducing barriers to maintain robust trade relations and competition in the market.
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