The United States is Israel's largest export destination as a single country, so any change in its trade policy is felt here. The impact runs through three channels:
- Direct: tariffs mainly hit goods exports. Services and software exports, which make up a large part of Israeli exports, are less exposed.
- Indirect: the US prefers production in friendly countries. Israeli companies that place a production line in the US or with its allies may benefit.
- Structural: US policy has become more transactional. Agreements are closed country by country, and trade, security and investment are tied together.
The third channel matters most in the long run. Anyone who reads only the tariff rate misses the logic behind it: the US uses the economy as a geopolitical tool, and small countries need to understand what they bring to the table.
This is the subject of Dr. Bella Barda-Bareket's forthcoming book, "Invest Like Trump", which offers a way to read economic and real estate value in an era of transactional diplomacy.