President Donald Trump in Washington, D.C., on April 3. Photo by Saul Loeb/AFP/Getty Images

Contributing Columnist Dany Bahar April 3, 2025

President Donald Trump has once again thrown a grenade into the global economy, this time with a sweeping plan to impose new tariffs on nearly all of the United States’ trading partners — friends and foes alike. The fallout of this catastrophic move will be global. And one of the unexpected major casualties? Israel.

Because Trump — whose supporters have often championed him as the most pro-Israel president of all time — has imposed 17% tariffs on Israel. Beyond the upheaval Israel’s economy will suffer with the destabilization of the global market in response to Trump’s moves, it suddenly just got a whole lot more expensive for the Jewish state to sell goods to the U.S. — only one day after Israel unilaterally removed tariffs on American exports.

Trump’s reckless institution of massive new costs for U.S. trade partners is the clearest sign yet of his extraordinary inability to manage the economy. This isn’t just erratic policy; it’s a reckless move that threatens to bring the country, and perhaps the world, to the brink of recession.

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For Israel, the timing couldn’t be worse.

According to trade data from Harvard’s Atlas of Economic Complexity, about 27% of all Israeli goods exports go to the U.S., making it Israel’s largest trading partner. Israel exports about $17.3 billion worth of goods to the U.S. every year, including pharmaceuticals and other chemical products; medical devices; advanced manufacturing such as electronics; and jewelry and precious stones.

Now, these exports will face a sudden 17% price hike for their American consumers.

Here’s the ultimate irony: This is the Boycott, Divest and Sanctions movement’s dream come true. After years of bipartisan legislation in U.S. states aimed at countering boycotts against Israel — whatever your view on that strategy — Trump has, effectively, enacted the closest thing to a boycott on Israeli goods ever seen.

What a gift to those, like advocates of BDS, who have long sought to isolate Israel economically. And what an affront to the many Jews who voted for Trump based largely on his stance toward Israel.

And this is not just rhetorical. For Israeli companies that export to the U.S., this is more than a policy shift — it’s a gut punch.

The goods they export will become more expensive in the U.S. — maybe even unaffordable — which means that fewer Americans will be willing to buy them. Sales and profits of Israeli exporting firms might — and probably will — drop significantly. These Israeli companies, which help drive the Israeli economy, will need to find other consumers in other countries to try to recoup their losses, which is not something that can be done overnight.

So, at least in the short term, many Israelis might lose their jobs, further destabilizing an already shaky Israeli economy.

And it’s clear that Trump’s move against Israel is a slap in the face. Not just because Israel had removed all its tariffs on U.S. goods a day before his announcement, in a likely bid to avoid getting caught up in the president’s tariff actions, but because Israel is facing harsher tariffs than many countries that don’t even qualify as major U.S. allies. For example, Arab countries such as Morocco, Qatar and the United Arab Emirates were hit with a 10% tariff. Russia does not even show up in the list, suggesting it will have to deal with no new tariffs at all.

Even more astonishing for me: My birth country, Venezuela, with which the U.S. does not have diplomatic relations — and which is led by a dictator who is openly anti-American — got assigned a 15% tariff.

So much for the notion that Trump holds Israel “very dearly,” as many Jewish voters had hoped.

After all, he’s well aware that Israel’s economy is already staggering, after experiencing essentially no economic growth after 18 months of multifront conflict following the Hamas attack of Oct. 7, 2023. The war; the domestic upheaval around Prime Minister Benjamin Netanyahu’s attempted judicial overhaul; and the period of sustained uncertainty both provoked have left many businesses, especially outside of the big cities, on life support.

The profitable tourism sector in Israel, for instance, has come to almost a complete halt. Social programs have been cut both because of the need to increase funding for the military and for other political reasons.

Now, this tariff shock could be the final blow for countless Israeli firms that took comfort in the idea that they at least had one reliable customer base in the American market.

Particularly hard-hit will be Israel’s technology sector — the powerhouse of its economy and the symbol of the “startup nation.” While there seems to be no tariff on Israeli services, with the new rates applying only to material goods, there remains a lot of uncertainty in the air about the openness of the U.S. market going forward to work with any foreign firm regardless of their industry, including Israeli ones.

Israeli tech companies rely heavily on U.S. investors and collaborators, and a cost barrier to access the American market could spell disaster for many, stifling innovation and choking off growth at the very moment the country needs it most.

This isn’t policy. It’s chaos masquerading as strategy. Whether Trump walks this disastrous set of policies back — as he has already done multiple times with perilous economic decisions, so early in his second term — or doubles down remains to be seen. But one thing is clear: Israel, along with the rest of the world, will pay a high price for a president’s unpredictable whims. And no amount of rhetoric about friendship or shared values can obscure the real-world damage now underway.

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