By Federico Maccioni
ABU DHABI (Reuters) – Israel is hopeful that it will reach a trade agreement with the United States before a pause to a barrage of U.S. tariffs on global imports expires on July 9, Israeli Economy Minister Nir Barkat told Reuters on Tuesday.
“There are a number of things under discussion… but I can tell you that both sides are optimistic that we can reach an agreement,” Barkat said in an interview during a visit to Abu Dhabi.
U.S. President Donald Trump announced sweeping tariffs on dozens of countries on April 2, leading to a rout in global financial markets and raising concerns of a recession. He later temporarily lowered most of those tariffs for a 90-day period, except for imports from China.
The United States is Israel’s largest trading partner and closest ally, with bilateral trade worth $34 billion in 2024.
The two countries signed a free trade agreement 40 years ago and Israeli Prime Minister Benjamin Netanyahu was the first foreign leader after the announcement of the new tariff policy to meet Trump at the White House, on April 7.
Netanyahu failed to secure a reprieve during his visit, when Trump also announced that the U.S. would engage in indirect talks with Iran, Israel’s arch-foe, over Tehran’s nuclear program.
Trump and Netanyahu again discussed trade issues and Iran on Tuesday during a call which the U.S. president said “went very well”.
Before April 2, Israel had moved to cancel its remaining tariffs on U.S. imports, but under the new U.S. policy, when fully implemented, Israeli goods would face a 17% U.S. tariff. The United States had a $7.4 billion goods trade deficit with Israel last year.
SEEKING ‘GOOD UNDERSTANDING’
While Israel is not immune to the tariffs, most of its exports comprise services, high-tech and software so they would not be impacted, Barkat said.
Barkat declined to comment on whether Israel was currently benefiting from the pause, but said it has been discussing with Washington how to reduce the trade deficit between the two countries, echoing Netanyahu’s words earlier this month.
“I believe that we could most probably get to a good understanding within that time-frame,” Barkat said, referring to the 90-day pause that expires on July 9.
Barkat was speaking during his second visit to the United Arab Emirates since he became minister in 2023.
The Gulf country became the most prominent Arab state in 30 years to establish formal ties with Israel in 2020 under a U.S.-brokered agreement dubbed the Abraham Accords, and the two countries have since rapidly built a close economic partnership.
A trade deal was signed in 2022 and the UAE has maintained the relationship during the Israel-Hamas war in Gaza.
Israel launched its assault on Gaza after Hamas fighters stormed across the border on Oct. 7, 2023, killing 1,200 people and taking more than 250 hostages, according to Israeli tallies.
More than 51,000 people have been killed in Gaza since then, according to the Gaza health ministry. Much of the heavily built-up enclave has been flattened and most of its 2.3 million people displaced multiple times, humanitarian agencies say. Hamas still holds 59 Israeli hostages.
(Reporting by Federico Maccioni in Abu Dhabi, additional reporting by Alexander Cornwell in Jerusalem, editing by Gareth Jones)
Comments