Israel Tariff Rates 2026: 12.5% on US Imports

Israel saw its tariff rate drop from 17% (IEEPA) to 10% (Section 122) following the Supreme Court's 6-3 ruling on Feb 20, 2026 — a 7-point reduction that strengthens the value of the US-Israel Free Trade Agreement, the oldest US FTA (signed 1985). When Section 122 expired July 24, 2026, Israel moved to the 12.5% tier of the Section 301 forced-labor tariff that replaced it. US imports from Israel total approximately $25B annually, with technology, cybersecurity, diamonds, and pharmaceuticals as the leading categories.

The US-Israel FTA, signed in 1985, was the first bilateral FTA the US ever signed and eliminates MFN tariffs on virtually all qualifying goods. The reduction from 17% IEEPA to 10% Section 122 makes the FTA even more valuable, as the surcharge layer on top of FTA preferences has shrunk by 7 points. Israel is a major technology, defense, and cybersecurity partner. The diamond trade (Israel is a leading cutting and polishing center handling an estimated 40% of global polished diamonds) and pharmaceutical exports are significant trade categories.

Key Products Imported from Israel

Top imports include pharmaceuticals, diamonds and precious stones (Israel handles roughly 40% of global polished diamond trade), medical devices, telecommunications equipment, cybersecurity and defense technology, organic chemicals, and agricultural technology products. Israel's tech sector — particularly cybersecurity, AI, and autonomous systems — has become an increasingly large share of exports to the US.

Recent Changes

Feb 20, 2026: Supreme Court struck down IEEPA tariffs 6-3; Israel's rate dropped from 17% to the 10% Section 122 baseline (effective Feb 24), which expired July 24, 2026 and was replaced by the Section 301 forced-labor tariff — Israel is in the 12.5% tier. A reduction that restores the US-Israel FTA's full competitive advantage. Section 232 metals tariffs apply at 50% on articles wholly of steel/aluminum and 25% on derivative products (both on full customs value, after the April 6, 2026 restructuring). The FTA — the oldest US bilateral trade agreement (1985) — now interacts with a lower surcharge layer, making Israeli goods more cost-competitive. Israel's technology and cybersecurity exports continue growing rapidly.

Tips for Importers

The US-Israel FTA eliminates the MFN base rate on qualifying goods, so the effective tariff is now just the 12.5% Section 301 forced-labor tariff (which replaced Section 122 on July 24, 2026, down from 17% IEEPA) — ensure you have proper FTA certificates of origin. Diamond classification matters significantly: rough diamonds typically enter duty-free, while cut and polished stones face varying MFN rates that the FTA can eliminate. Pharmaceuticals and medical devices generally enter at 0% MFN, making the 12.5% forced-labor tariff the only layer. For cybersecurity and tech products, many electronics HTS codes carry 0% MFN rates. Section 122 expired July 24, 2026 and was replaced by the 12.5% forced-labor tariff; FTA-qualifying Israeli goods pay only that forced-labor surcharge on top of duty-free FTA treatment.

US-Israel FTA and Trade History

The US-Israel Free Trade Agreement, signed in 1985, was the first bilateral FTA the United States ever negotiated. It eliminated tariffs on virtually all qualifying industrial and agricultural goods between the two countries. For nearly four decades the FTA kept trade friction low, making Israel a preferred sourcing origin for diamonds, pharmaceuticals, and defense technology. The April 2025 IEEPA tariffs disrupted that relationship by layering a 17% surcharge on top of FTA preferences — the first time Israeli exporters faced meaningful US tariff costs in decades. The SCOTUS ruling in February 2026 partially restored the status quo by cutting the surcharge to 10% under Section 122. Israel is one of the world's top five diamond cutting and polishing centers, handling roughly 40% of global polished diamond trade by value. The Ramat Gan diamond exchange processes billions of dollars in stones each year, and most US-bound polished diamonds transit through Israeli facilities. Israeli footwear exports have also grown in recent years, led by brands like Naot and Source Sandals, which benefit from both FTA preferences and the current Section 301 forced-labor rate (12.5%, which replaced Section 122 on July 24, 2026). Section 122 expired July 24, 2026 and was replaced by the Section 301 forced-labor tariff (12.5% for Israel), so FTA-qualifying Israeli goods pay only that surcharge on top of duty-free FTA treatment — still among the most favorable tariff treatment of any non-USMCA country.