Israeli Finance Minister Bezarel Sumotrich, Treasury Ministry of Iran and Rom and Chief Economist Schmuel Abramzon held final talks today on issues addressing the Trump administration's tariff plans. Tonight, they will hold a follow-up call with Prime Minister Benjamin Netanyahu as part of their preparations for negotiations with the US.
The Treasury aims to send two delegations to Washington. The first delegation will consist of professional teams and fly as quickly as possible for discussion with the Trump administration counterparts. A second delegation then flies to the US capital led by Smotrich himself to complete the transaction. The decision regarding the initial delegation to the US and the composition of its timing will be decided by Netanyahu, but Minister of Economy, Neil Burkatt, is also interested in participating in US consultations.
The 17% tariff imposed on goods from Israel is considered by the Ministry of Finance as a high starting point for negotiations. The level of tariffs appears to be determined according to the drying formula presented by Americans in recent weeks.
Technically, the US calculates national tariff rates based on the trade deficit. In other words, the more the country sells to the US than it buys, the higher the tariff rate it is imposed on.
Netanyahu said at a joint press conference with US President Donald Trump that Israel will work to reduce the trade deficit. Assuming Israel doesn't want to reduce its exports, it will need to import more.
Israel has already announced the cancellation of several tariffs present on US goods and the transfer of import reforms from Europe to US imports. However, this is not enough to significantly reduce tariffs.
The Treasury has not even tried to estimate the number of tariffs Israel will save as a result of each announced measure and other agenda, such as cancelling mutual procurement requirements. This understands that actual tariffs are set in lectures in one package or in another package, rather than in accordance with a simple formula.
Will bureaucracy be reduced?
If the tariffs imposed on Israel are not determined solely by dry people with a trade deficit, what else can determine the final tariff? The answer may be to address bureaucracy.
All Israeli businesses are familiar with Labyrinthin's Israeli bureaucracy and have a notorious reputation among American companies. The chapter dedicated to Israel in the Trump administration's tariff planning report points to a set of requirements and regulations that make it difficult for American businesses to do business in Israel. These include the lack of regulatory transparency in government bidding, arbitrary standardization, and harsh requirements. It all sounds familiar to Israeli ears.
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In a short time, the US was able to bring about reduced bureaucracy. This failed to achieve the long-standing proposals for all protests and reforms by public commissions to open competition in Israel.
The key points in the measures and benefits rafts Israel offers to Americans during their visit to Washington are based on comments in the US administration's report. Israel is trying to provide a response to each issue raised, including bureaucratic aspects.
For example, US companies complain that food law updates are only available to subscribers of private legal databases. Another argument is that, in contrast to the accessibility given to Israeli companies in the US market, there is no access to Israeli defence procurement due to local agents or local bank account requirements. E-commerce has difficulty with Israel's restrictions on data transfer across Israeli borders, making digital business activities difficult.
While easing Israel's bureaucracy could only serve the United States, all of these barriers need to be addressed in Israel to obtain relief from the customs program.
Published by Globes, Israel Business News -en.globes.co.il- April 20, 2025.
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