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: 2021-09-09

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

  • U.S.-Israel Free Trade Agreement, 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 # of startups outside of Silicon Valley.

Since signing the Free Trade Agreement (FTA) in 1985, U.S.-Israel trade has grown sixfold. In 2019, U.S. exports of goods to Israel totaled $14.4 billion, a 5% increase over that figure in 2018. Principal categories of U.S. merchandise exports to Israel in 2019 were:

  • Miscellaneous Manufactured Commodities (30.7%);
  • Transportation Equipment (24.1%);
  • Computer & Electronic Products (10.3%);
  • Chemicals (7.1%); and
  • Machinery, Except Electrical (6.5%)

In 2019, exports of U.S. goods and services combined to Israel were $20.1 billion, compared to $19.9 billion in 2018.

In 2019, U.S. imports of goods from Israel totaled $19.5 billion, a 10% decrease over that figure in 2018. Principal categories of U.S. merchandise imports from Israel in 2019 were:

  • Miscellaneous Manufactured Commodities (40.1%);
  • Chemicals (16.3%);
  • Computer & Electronic Products (12.5%); and
  • Machinery, Except Electrical (6.6%).

In 2019, U.S. imports of goods and services combined from Israel were $26.9 billion compared to $29.2 billion in 2018.

Israel’s 2018 Gross Domestic Product (GDP) real growth increased by 3.5% over 2017. GDP Per Capita, Purchasing Power Parity (PPP), increased from $38,966 in 2017 to $40,261 in 2018, and Israel’s 2019 inflation rate decreased to 0.6% from 0.8% in 2018. Israel’s 2018 unemployment rate (% of labor force) was 3.8%, compared to 4.0% in 2017. In 2018, Foreign Direct Investment (FDI) in the U.S. by Israel totaled $38.5 billion, and U.S. FDI in Israel totaled $27.1 billion.