Photo: www.gov.il
6 April, Jerusalem – Israeli Prime Minister Benjamin Netanyahu has come under fire from the business community and economists for failing to contain the tariffs recently imposed by US President Donald Trump. The new 17 per cent tariffs on Israeli exports, imposed as part of Washington’s global trade strategy, have caused deep anxiety in global markets and could deal a serious blow to the Israeli economy.
This was reported by Ynet, noting that Israeli business leaders accuse Netanyahu of diplomatic inaction that allowed the trade crisis to reach a critical point. A senior Israeli finance ministry official, speaking on condition of anonymity, said that the government “does not understand the scale of the threat” and that there was “an inexplicable complacency even when it became clear that Israel would suffer significant losses”.
The Israeli stock market is preparing for a shock. On Sunday, the Tel Aviv Stock Exchange is expected to plummet following the historic collapse on Wall Street, where more than $6.6 trillion was lost in just two days. The S&P 500 index fell by 10% and the Nasdaq by 5.8%, marking the beginning of a new bear market.
Dr Ron Tomer, President of the Israeli Manufacturers Association, called for immediate negotiations with the US to reduce the damage from the tariffs. The government, according to sources, is considering reducing the rate from 17% to 10% as a compromise.
However, an economic adviser close to Netanyahu told Ynet and Mamon:
“Netanyahu should have explained that the country has been at war for over a year, the economy is weakened, and exports are critical. Instead, he engaged in political manoeuvres and an unnecessary trip to Hungary.”
Possible consequences for the Israeli economy:
– Closure of export-oriented plants
– Potential bankruptcies of small producers
– Mass dismissals
– Rising prices for imported goods
– Transfer of production to the USA
– Rising inflation and budget deficit
Industry representatives also criticised the government’s decision to cancel only NIS 42 million in duties on US agricultural products, calling it a “symbolic and naive gesture”. Finance Minister Bezalel Smotrych is also under fire for failing to meet with the US Secretary of Commerce, who directly oversees customs policy, during his visit to Washington.
Meanwhile, markets are reacting:
– Shekel: the dollar rose by 0.4% (to 3.72), the franc by +1.4%, and the euro by -0.1%.
– Gold: record high of $3,055 per ounce.
– Bank of Israel rate: expected to remain unchanged at 4.5%.
Businesses are hoping that Netanyahu will use his scheduled meeting with Trump on Monday to lift or at least ease the tariffs. As one industry leader put it:
“Better late than never. We may have missed a chance to avoid the blow, but it is not too late to mitigate it.”
