Israel - Country Commercial Guide
Market Overview

Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant.

Last published date: 2022-08-12

Top five reasons why U.S. companies should consider exporting to Israel:

  • U.S.-Israel Free Trade Agreement (FTA), signed in 1985. Nearly all non-agricultural trade tariffs have been eliminated;
  • The U.S. is Israel’s single largest trading partner. The Israeli market is highly receptive to U.S. products and services;
  • Israel is the second largest trading partner for the U.S. in the Middle East;
  • Despite regional geopolitical challenges, Israel has a stable, strong economy;
  • Israel has a thriving innovation ecosystem and is a global leader in the number of startups outside of Silicon Valley.

Since signing the FTA in 1985, U.S.-Israel trade has grown sixfold. In 2021, exports of U.S. goods and services combined to Israel were $18.2 billion, compared to $14.5 billion in 2020. In 2021, U.S. merchandise exports to Israel totaled $12.8 billion, a 25% increase over that figure in 2020. Principal categories of U.S. merchandise exports to Israel in 2021 were: 

  • Miscellaneous Manufactured Commodities (25.5%);
  • Computer & Electronic Products (23.2%);
  • Transportation Equipment (10.7%);
  • Chemicals (8.6%); and
  • Machinery, Except Electrical (7.6%)

In 2021, U.S.  Imports of goods and services from Israel were $26.9 billion, up 25.1% from 2020. In 2021, U.S. imports of merchandise from Israel totaled $18.6 billion, a 22% increase over that figure in 2020. Principal categories of U.S. merchandise imports from Israel in 2021 were:

  • Miscellaneous Manufactured Commodities (33.9%);
  • Computer & Electronic Products (18.7%)
  • Chemicals (15%); and
  • Machinery, Except Electrical (6.1%).

According to the International Monetary Fund, Israel’s 2021 Gross Domestic Product (GDP) real growth increased by 8.19% over 2020.  GDP Per Capita, Purchasing Power Parity (PPP), increased from $44,181 in 2020 to $51,416 in2021 and Israel’s 2021 inflation rate increased to 1.5% from -0.6% in 2020. Israel’s 2021 unemployment rate (% of labor force) was 3.9%, compared to 4.96% in 2020. In 2020, Foreign Direct Investment (FDI) in the United States by Israel totaled $29.1 billion, and U.S. FDI in Israel totaled $40.4 billion.

Political & Economic Environment:  

State Department’s website for background on the country’s political environment.

Direct link: https://www.state.gov/u-s-relations-with-israel/