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Wall Street Journal

Israel Less Vulnerable to Tariffs as a Service Economy

Israeli goods exported to the U.S. that will be directly impacted by the new American tariffs include machinery, electronic equipment, optical equipment, and diamonds. But two thirds of Israeli exports to the U.S. are services, which aren't subject to the tariffs, including the country's high tech sector. 'In that sense being a service economy we are somewhat less affected by tariffs on goods and not on services,' said Karnit Flug, a former governor of the Bank of Israel and now a senior fellow at the Jerusalem-based think tank Israel Democracy Institute. Flug said Netanyahu's meeting with Trump on Monday was important, but that even if successful, Israel's economy would still suffer from the worldwide effects of the tariffs such as a slowdown in trade and demand.