The Trump administration agreed at the last minute to some of Israel’s requests for significant tariff relief on exports to the United States, including duty‑free treatment on hundreds of products, but stopped short of lowering the overall tariff rate to the level Israel sought, Israeli officials said Sunday.
Under the agreement now being finalized, the U.S. will set the general tariff on Israeli exports at 15%, down from the 17% rate initially proposed, but above the 10% minimum tariff that Israel had pressed for. Israeli requests to reduce the tariff to that lowest level, applied by the U.S. to some other countries, were rejected, according to officials who spoke to ynet.
The tariff decisions are expected to be formally announced by the U.S. Secretary of Commerce by the end of the month, as Washington moves to conclude its revised tariff agreements with several trading partners, including Israel.
The announcement follows earlier U.S.–Israel talks on agricultural tariffs, in which many U.S. farm products imported into Israel had duties eliminated, while Israel secured a 10‑year delay before full duty‑free treatment takes effect in order to protect its domestic farmers.
Israeli negotiators, from the Economy and Industry Ministry and trade attachés in the United States, had pushed for a reduction of the overall tariff cap from 17% to 10% to preserve Israel’s competitive standing. Before the Trump administration imposed the tariffs, Israel had one of the few full free‑trade agreements with the United States among countries outside the Americas.
A senior Israeli economic official said Trump appears unwilling at this stage to drop the overall tariff rate below 15%, with Washington insisting that the general rate apply uniformly. The official suggested that Trump may be reserving deeper concessions for a broader regional deal involving Israel, Saudi Arabia and other countries, potentially tied to expanded normalization agreements.
Despite not securing an immediate cut to a 10% general tariff, Israel’s negotiating team, led by chief negotiators Ifat Perl and trade attaché Yoav Seidel, expressed confidence that the final agreement, expected this month, will include extensive exemptions for hundreds of specific products.
Under U.S. national security tariff provisions known as Section 232, Israel is expected to receive unusual duty exemptions on aircraft parts and automotive components — sectors in which Israel has significant industrial capacity — as well as on metals included in the broader agreement. Israel will also gain duty‑free treatment for semiconductors and generic pharmaceuticals, though final U.S. decisions on tariffs in those areas remain pending.
In addition, the White House plans to publish Annex 3 to its tariff schedule, a list of roughly 150 categories — encompassing some 1,900 tariff lines — where countries can win exemptions in trade talks. Israel, along with some major European economies, will be included in that list. Exempted product categories are expected to include chemicals and minerals, food and agricultural products, vehicle and aircraft parts, pharmaceuticals, vitamins and metals.
European Union countries have so far won exemptions in about 80 such categories; under the emerging U.S.–Israel arrangement, Israel is expected to secure duty‑free status in 120–140 categories. The exact list will be finalized before the end of 2025.
Israeli officials said the broad exemptions will help preserve Israel’s preferential position vis‑à‑vis other markets and support domestic manufacturing as a strategic supplier to the United States.
But they said their ultimate goal — a general tariff cut from 15% to 10%, and eventually to zero — remains in view. “The holy grail is to reduce the general tariff to 10% and, in the future, eliminate it entirely,” one senior official said.
Officials said they hope that progress on regional normalization — which the United States is pushing to include Saudi Arabia and Indonesia in expanded Abraham Accords before Israel’s elections next fall — will bolster prospects for full duty‑free access for Israel. Such a breakthrough, they said, could provide a major boost for Israeli manufacturing and the local economy.