It was high time and has been called for several times on this blog, including just a few days ago.
Israel finally needs a free market economy and must also free itself from its dependence on the three socialist/authoritarian blocs EU, China, and Russia.
It cannot be that the EU, Russia, and China have been running trade surpluses with Israel for a decade, year after year, while the US has a negative trade balance with Israel.
In a joint press statement, Prime Minister Netanyahu, Finance Minister Smotrich, and Economy Minister Barkat announced the end of all tariffs on US goods. A good and correct decision.
The press release of the Israeli government explains: “The 1985 US-Israel Trade Agreement (USTAS) has resulted in the vast majority (approximately 99%) of products imported from the United States already being fully duty-free.
Therefore, the reduction in tariffs will apply to a very limited number of products, in the category of food and agricultural imports from the United States.“
The reactions are enthusiastic, but completely unfounded. There will be no significant reduction in the cost of living, let alone a free market economy. Israel does not have a free market economy. The hope that this abolition of tariffs will lower the cost of living is unfounded.
The statement of the Finance Minister Smotrich is disconnected from reality. It will not reduce the costs of living. No way: “Lowering taxes will benefit the State of Israel and is in line with the government’s policy in the fight against the cost of living, and will even increase competition in the food sector.“
Why? The main drivers of the high cost of living are monopolistic import structures, a lack, some even say absence, of competition, oligarchic structures, high levels of state centralism, high bureaucratic costs, bad infrastructure (bad roads, bad maintained warehouses, inefficient harbours in the grip of the unions, etc pp), and, finally, the protection fees that businesses owners have to pay to criminal organizations. All that pays the citizen with high prices.
However, to level the playing field for the USA will be a long way and cause some pain for the oligarchic and state elites. The very reason why they defend the deep state.
The deep state guarantees those socialist-styled economic structures. It’s economy, stupid. To dismantle the deep state and the juristocracy means to lower the costs of living, and reestablish democracy and Judaisms (sic!) in Israel.
Don’t feed your enemy
There are no products which Israel can’t obtain from the USA, which is a steadfast ally that neither the EU, Russia, nor China ever was and is. Quite the opposite. It is insane that Israel feeds hostile, respectively, antisemitic states.
If Israel is asking what it can contribute to the fight against antisemitism, the answer is clear: Buy from your allies.
Israel’s top trade partners should be, in the first place, the USA, then India (if India opens its embassy in Jerusalem), and then the rest of the pro-Israel states that opened an embassy in Jerusalem.
If we look at the cumulated trade volume of the EU, Russia and China (2013 -2023), it is obvious that Israel has to alter its track. It can’t be that Israel is supporting all the hostile antisemitic states. No wonder Israel is losing traction. If you finance your enemies, no surprise.
Summary of Cumulative Trade Volumes (2013–2023)
- European Union (EU): $515.2 billion
- China: $166.41 billion
- Russia: $40.93 billion
So, we speak of a trade volume of $719.54 billion, which must be redistributed/redirected to our allies and friends (the USA and all those who have an embassy in Jerusalem). Israel should and must do it. And if Israel has a deficit, it is better to have a $224.02 billion deficit with allies and friends than with enemies and hostile states.