Source: Ukragroconsult (Ukraine)
Israel wheat tariffs are changing as the country plans further trade concessions to the United States. Moreover, these efforts aim to persuade its closest ally to ease export duties from the Jewish state.
Prime Minister Benjamin Netanyahu’s government intends to abolish the duty-free quota and raise the duty to 50% on feed wheat imported from countries other than the US starting in April. Furthermore, Israel’s Deputy Trade Commissioner Ifat Alon Perel told Bloomberg about these plans.
Israel Wheat Tariffs: Strategy and Negotiations
Officials hope that making American wheat more competitive with Israel’s traditional suppliers will help secure an agreement to ease tariffs on goods imported from the US. Consequently, they remain in force even after Netanyahu, who has close ties with Donald Trump, announced the cancellation of all tariffs on American products.
Plans to give the US preference in wheat imports were not revised after the US Supreme Court ruled on Friday to overturn President Donald Trump’s global tariffs. Meanwhile, he quickly replaced them with other measures.
The latest round of talks between the two countries took place in Washington in early February. Additionally, they continued “in a very positive vein,” said Perel, who heads the Israeli negotiating team.
Israel is seeking to reduce its 15% tariff, but assumes that the rate will not be reduced to zero in the coming years. Furthermore, negotiators are focused on reducing the tariff by 50% and creating a duty-free regime for several key sectors, Trade Commissioner Roy Fisher said, without specifying which areas.
Speaking at the Bloomberg Future of Israel’s Capital Markets forum in Tel Aviv, Fischer said he believes tariffs will remain part of Trump’s new doctrine. “We have to realize that 15% is the new zero,” he said.
Market Context and Import Dependencies
Israel imports almost all of its wheat consumption, mainly from the Black Sea region. Specifically, according to the US Department of Agriculture (USDA), Russia accounted for 60% of total wheat imports last year.
Separately, Israel plans to spend up to 600 million shekels ($193 million) over the next decade to subsidize freight costs for food or milling wheat imported from the US, according to an Israeli source familiar with the government’s position. Wheat for human consumption is duty-free for all exporters.
According to the US Trade Representative’s Office, as of 2024, Israel had a trade surplus in goods (excluding services) from the US of $7.4 billion. Furthermore, last year, that surplus fell to $6.7 billion.
Domestic Concerns and Price Impacts
At the same time, the plans have raised concerns in Israel that the elimination of tariffs on American agricultural products will negatively affect the local sector. Consequently, members of a parliamentary committee are delaying the approval of the revised free trade agreement with the US and insisting on guarantees of compensation for farmers.
“For some industries, this is a death sentence,” said Israeli Minister of Agriculture and Food Security Avi Dichter.
According to USDA forecasts, wheat imports to Israel will increase to 2.15 million tons in the current marketing year. Moreover, this growth stems mainly from demand from farmers who do not have enough pasture to keep livestock.
Farmers note that the introduction of high tariffs on feed wheat from countries other than the US will further increase the already high food prices in Israel. “The price of chicken will rise by 50-70%,” said Dubi Amitai, head of the business sector presidium, during a hearing of the monetary committee.