Art of the Deal: Trump and Netanyahu Agree on Trade Barriers

On Monday, President Trump met with Israel's leader, Prime Minister Benjamin Netanyahu, for talks on a variety of subjects, including (unsurprisingly) Iran. But in the course of the discussion, the topic naturally turned to tariffs, which led to Prime Minister Netanyahu vowing to eliminate any trade barriers between Israel and the United States.

🇺🇸 -- NOW: Israeli Prime Minister Netanyahu talks trade with President Trump min the Oval Office:

• Netanyahu: "We will eliminate the trade deficit with the United States. We intend to do it very quickly. We think it's the right thing to do and we're going to also eliminate… pic.twitter.com/5v0Pqf808T
— Belaaz News (@TheBelaaz) April 7, 2025

The Israeli Prime Minister, speaking to the assembled media, said:

I can tell you, I said to the president, we will eliminate the trade deficit with the United States. We intend to do it very quickly, we think it's the right thing to do, and we're going to also eliminate trade barriers. The variety of trade barriers that have been put up unnecessarily. And I think Israel can serve as a model for many countries who ought to do the same. I recognize the position of the United States, it says, you know, we are allowing other countries to put tariffs on us, but we don't put tariffs on them, and you know, I'm a free trade champion, and free trade has to be fair trade. And I think, basically, that's the position that you put forward, Mr. President, and we are going to eliminate the tariffs, and rapidly.

This comes not long after the European Commission President Ursula Von der Leyen came looking for a deal. This is beginning to look a lot like the first few dominos starting down.

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PM Netanyahu later took to his official X account to announce some more details.

Today we cancelled all of the customs duties levied on products from the US, Israel's largest trading partner.

Cancelling the customs duties on American goods is an additional step in the policy that my governments have led for a decade in opening up the market to competition,…
— Benjamin Netanyahu - בנימין נתניהו (@netanyahu) April 1, 2025

The X post continues:

Cancelling the customs duties on American goods is an additional step in the policy that my governments have led for a decade in opening up the market to competition, introducing variety to the economy and lowering the cost of living.
In addition to the advantages to the market and to citizens of Israel, the current effort will allow us to further strengthen the alliance and ties between Israel and the US. We will continue to work to reduce barriers and customs, and bolster our special relationship with the US.

Settling on some new trade arrangment and (presumably) a drop in tariffs with Israel and Europe would be a big feather in Donald Trump's red MAGA cap, but there's still a long way to go - and it's unclear if most of the tariffs will go to what a real free-trade system would look like, namely, zero. President Trump has also spoken at length about the need to bring American manufacturing back to the United States, and tariffs on places like China - the elephant in this particular room - would put pressure on American companies like Nike to bring some or all of their operations back.

Israel is a significant trading partner. Reaching a deal with them isn't the biggest of all possible deals, and it's not going to stop some more heebie-jeebies in the market - or in the media. But along with this morning's announcement from Europe, it's beginning to look a lot like this whole scheme may actually work.

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