President Donald Trump’s newly implemented tariffs may have disastrous effects on the Israeli agriculture industry. That’s according to Zvi Alon, former senior deputy director for foreign trade and international affairs at the Agriculture Ministry. Just as troubling, Alon told Davar, is Israel’s decision last week to remove import levies on American agricultural products.
A day before Trump announced his tariff plan, Finance Minister Bezalel Smotrich and Economy Minister Nir Barkat scrapped quotas and levies on US agricultural imports in an attempt to preempt the tariffs. The move, which followed Prime Minister Benjamin Netanyahu’s directive, failed to deter Trump, who imposed a 17% tariff on Israeli goods.
Alon called the removal of a levy on American produce a “fatal blow” to Israeli agriculture. “I can say with certainty this move will wipe out 70% of Israeli agriculture,” he said.
Well-versed in 1985’s Israel-US Free Trade Agreement, Alon is frustrated. “Unilateral tariffs go against the very logic of the agreement,” he said. “It’s a signed deal—neither side imposes tariffs, except in agriculture. We’ve honored it to the letter. Why break it now?”
For years, Alon oversaw Section 6 of the agreement, which allows exceptions for food and agricultural products. Trump’s tariff plan shakes the entire deal, especially this critical section. “This is outright bullying,” Alon said. “An impulsive act without understanding its implications—not just for us, but possibly even for American producers.”
The free trade deal with Israel was America’s first. It eliminated most tariffs by 1995, except on certain agricultural goods like wine, cheese, and honey. Over the years, Israel agreed to several American requests for flexibility, improving import conditions in 2004.
Alon recalled a 1995 meeting with US Secretary of Commerce Mickey Kantor where they agreed to reduce certain levies to preserve the friendship.
“The trade agreement mostly benefits us,” Alon explained. “Our exports are primarily industrial and tech, while their agricultural exports to us far exceed ours to them—mainly grains and meat, where we have weaknesses.”
A June 2024 review by Israel’s Economy Ministry affirmed the free trade agreement’s value, noting it serves Israeli exports well and includes ongoing bilateral consultations. Even updates made to benefit the US preserved the protection of local food production.
The removal of levies came under pressure from the Trump administration as part of its aggressive global trade strategy. In recent weeks, the US warned partners, including Israel, to remove tariffs or face new ones. Israel complied—but still faced the announcement of a 17% tariff on Trump’s “Liberation Day.”
The US is a major Israeli trade partner. In 2024, Israel exported $17.3 billion in goods and $16.7 billion in services to the US. The US accounted for 26% of Israel’s non-diamond goods exports, compared to 36% to Europe and 22% to Asia. Israel earned just 42 million shekels ($11 million) annually from agricultural levies on US imports—a tiny figure compared to America’s $174.4 billion in 2024 agricultural exports.
In response to the tariff announcement, Israel’s Agriculture Ministry quickly convened agricultural leaders to assess the fallout.
In Israel, Agricultural trade policy isn’t just economic—it’s also strategic and security-related, affecting Israel’s rural and border regions.
“This step will devastate local agriculture and threaten national food security. Especially after October 7, we must support every last furrow and every border farmer,” Amit Yifrach, head of the Israeli Farmers Federation, and Uri Dorman, the group’s secretary general, told Davar.
They warned that duty-free imports will severely harm Israeli farming, especially near the borders, potentially forcing residents to abandon those communities.
Which sectors will be affected? “Everything that can be shipped in two and a half weeks,” Alon said—fresh fruits and vegetables, dairy, honey. “Israel is expensive—labor and water costs are high. US farms are massive, and scale drives costs down. Their prices beat us, even after shipping.”
Without levies, the Israeli market will be flooded with potatoes, apples, pears, almonds, onions, carrots, and dairy from the US. “It’ll bankrupt local farmers,” Alon said. “Why buy Israeli potatoes or frozen fries when US imports are 20–30% cheaper?”
The apple industry illustrates the threat. In a normal year, Israel imports 20,000–30,000 tons of apples from the US out of 120,000 tons sold domestically. Without a 1.50 shekel (about $0.40) per kilo levy, imports will rise sharply and could wipe out apple growers in the Galilee and Golan within a year.
Will Israeli consumers benefit? “Maybe initially, but once local farming is gone, importers can raise prices,” Along said. “That happens everywhere. Agriculture here is a 40 billion shekel [$10.8 billion] sector—13 billion in fruits and vegetables, 17 billion in field crops and grains, and the rest in dairy, eggs, poultry, and beef. The damage will be in the billions and ripple across processing plants, dairies, logistics—especially in the periphery. Shutting down large parts of agriculture is unthinkable.”
“Physical security and food security are both on the line,” he warned. “Trump sees this as an economic issue. But it’s about keeping agriculture alive—so we can eat, and so farmers can hold our borders and communities. What have we learned from October 7?”
The Agriculture and Food Security Ministry said it's evaluating the US decision and its potential impact. Most US agricultural imports are already duty-free, but a small list of sensitive products still enjoy tariff protection, including apples, pears, persimmons, almonds, potatoes, industrial tomatoes, peanuts, chickpeas, sweet corn, and frozen vegetables.
“The step could severely harm Israeli agriculture and weaken national food resilience,” the ministry said. “We’re working on a direct aid plan to protect these sectors, especially in light of the damage already inflicted by the war.”
