Israel plans to increase US wheat imports to ease Trump duties

Israel plans to make further trade concessions to the US on food and agricultural goods, as part of efforts to persuade its closest ally to ease tariffs on exports from the Jewish state.

Prime Minister Benjamin Netanyahu’s government intends to scrap a tax-free quota and raise levies to 50% on wheat-feed imported from countries other than the US starting in April, Israel’s deputy trade commissioner Yifat Alon Perel told Bloomberg.

Officials hope that boosting the competitiveness of US wheat against Israel’s traditional suppliers — the largest of them being Russia — will help clinch a deal to ease tariffs on goods shipped to the US. These have remained in place even after Netanyahu, who enjoys a close relationship with Trump, said all duties on US products would be removed.

Plans to give the US an edge on wheat imports were undisturbed by the US Supreme Court’s decision Friday to strike down President Donald Trump’s global tariffs, which he swiftly replaced.

The latest round of talks between the two countries took place in Washington in early February and continued “in a very positive trajectory,” said Perel, who heads Israel’s negotiating team.

Israel is pushing to lower its 15% tariff, but assumes the end point won’t be zero in the coming years. Negotiators are instead focused on bringing the rate down by 50% and carving out a tax-free regime for a few leading sectors, Trade Commissioner Roey Fisher said. He refused to specify the sectors being considered.

Speaking at Bloomberg’s Future of Israel’s Capital Markets Forum in Tel Aviv, Fisher said he believes tariffs are here to stay as part of Trump’s new doctrine.

“We need to realize that 15% is the new zero,” Fisher said.

Israel imports almost all of the wheat it consumes, primarily from the Black Sea basin. Russia accounted for 60% of all wheat imports last year, according to a report by the US Department of Agriculture.

Separately, Israel is planning to spend up to 600 million shekels ($193 million) over the next decade subsidizing freight costs on human-grade, or milling, wheat imported from the US, an Israeli official familiar with the government’s thinking said, asking not to be identified discussing ongoing negotiations. Wheat for human consumption is duty free for all exporters.

The US Trade Representative’s office did not respond to requests to comment. Subsidies on US freight costs were first reported by Israeli newspaper Globes.

Incentives on US wheat purchases expand on a free-trade agreement between Israel and the US, revised in December to include food and agricultural goods previously left out to protect farmers. A limited group of some 30 items like apples, almonds or cherries will gradually become tax free over the course of a decade to allow Israeli growers time to prepare.

Israel had a trade surplus, excluding services, of $7.4 billion with the US as of 2024, according to the US Trade Representative. Last year Israel’s goods surplus narrowed to $6.7 billion, according to data released earlier this month in Washington.

Farmers Concerned

The plans have raised concerns in Israel that the end of tariffs on US agricultural goods will negatively impact the local sector. Members of a parliamentary committee are holding up the approval of the revised free-trade agreement with the US and are making it contingent on the government committing to compensate farmers.

“It’s a death sentence for some industries,” Israeli Agriculture and Food Security Minister Avi Dichter said.

Israel’s wheat imports are expected to increase in this marketing year to 2.15 million metric tons, primarily due to demand from farmers who lack grazing land for livestock, according to the USDA report.

Farmers say that imposing high levies on animal-grade wheat from non-US suppliers — even if US imports are excluded under the revised free trade agreement — will further increase already-high food prices in Israel.

“The price of chicken will surge by 50-70%,” the Business Sector Presidium’s chairman Dubi Amitai said at a monetary committee hearing.

Tags: Black Sea region, wheat, Israel, USA, duties, restrictions