U.S. President Donald has sent trade negotiators to Israel to discuss lowering the high tariffs placed on U.S. products to Israel.
Bloomberg News reported that Trump wants to level the economic playing field. Under an existing agreement, “virtually any product produced in Israel that can be competitive in the U.S. market, can enter the U.S. duty-free. In contrast, U.S. products continue to face high tariffs in many sectors limiting their access to the Israeli market,” a U.S. Department of Agriculture’s Foreign Agricultural Service report said.
In 2017, the U.S. ran a trade deficit of almost $14 billion with Israel, despite the Jewish state having an economy 55 times smaller. America is Israel’s biggest trading partner with annual trade worth $30 billion, according to data compiled by Bloomberg.
The free trade agreement between the two countries was brokered in 1985. Since then Israel has expanded its economic output significantly.
A new deal would open Israeli markets to more competition and could potentially reduce high consumer costs, Bloomberg said.
On the other hand, it could have a negative effect on Israeli made products. One of the reasons for the high tariffs is to make sure that Israeli made products are less expensive than foreign imports.