Exporters cannot fight American tariffs alone
The imposition of a 12.5% tariff on Israeli goods in the US threatens company competitiveness. Minimizing the damage requires both immediate business adjustments and active government support.
The imposition of a 12.5% tariff on products imported from Israel to the USA is not just another technical change in trade policy. It is a move that could directly harm the competitiveness of Israeli companies in their most important market, reduce their profitability, and raise prices for American customers.
For years, the free trade agreement between Israel and the USA provided a significant advantage to Israeli exporters. Products from Israel entered the American market duty-free and competed on favorable terms against suppliers from other countries. Now, when an Israeli product becomes 12.5% more expensive, while an American manufacturer is not required to pay any tariff at all, this advantage is rapidly eroding. The damage could be particularly severe for small and medium-sized companies that lack the ability to absorb significant price increases, offer deep discounts, or pass the full cost on to the customer. In many cases, they will be forced to choose between reduced profitability and the loss of deals and market share.
However, companies must not settle for waiting for a political solution. Every company is required to immediately perform an accurate mapping of its exposure: check the product's tariff code, the country of origin for customs purposes, the identity of the importer of record, and the terms of sale that determine who bears the payment. Simultaneously, the business model must be re-examined. Companies that combine hardware, software, licenses, cloud services, maintenance, and support can explore whether it is appropriate to increase the revenue component from ongoing services. Other companies can consider assembly, finishing, packaging, or operational activity in the USA. Any such change must be real, commercial, and documented, rather than an artificial move intended to bypass customs rules.
Agreements with American distributors and customers also need to be reopened. Instead of placing the entire additional tariff burden on one party, it is possible to share the burden through a moderate price increase, changes in discounts, volume commitments, long-term contracts, or adjustments to the supply structure. However, the responsibility cannot remain solely on the shoulders of the companies. The Government of Israel must establish an inter-ministerial task force, map the exposed sectors, activate an assistance track for companies, and work with the US administration to move Israel to the low tariff track of 10%, as well as to obtain exemptions for essential products in the fields of health, security, and innovation.
The message to the US administration must be clear: Israeli companies do not just sell products in the USA. They establish local operations, create jobs, strengthen American industries, and contribute to security, health, and innovation in both countries. The new tariffs are a real challenge, but not a foregone conclusion. A fast, professional, and coordinated response from the government and the business sector can reduce the damage and preserve one of the fundamental assets of the Israeli economy — the economic partnership with the USA.
Galit Miran is the CEO of the Israel–America Chamber of Commerce.
