Understanding the Evolution of Tariff Policy and Its Implications for Israel

The Threatening Shift in Global Affairs

In recent years, Israel has faced a significant transformation in its economic landscape, largely driven by changes in global tariff policies. The current tariff policy is part of a challenging shift that poses a threat to Israel’s future. Israel has struggled to produce the necessary ammunition for its defense forces, highlighting a potential vulnerability in its strategic capabilities. A nation’s strategic strength is contingent not just on weaponry, but on overall economic resilience and independence. While Israel boasts a thriving high-tech sector, recent tariff policies, particularly those introduced by former U.S. President Donald Trump, are expected to have rapid repercussions for both the nation and its residents.

Trump’s declaration that tariffs will be reciprocal has left many wondering if Israel will eliminate the tariffs it imposes on American goods. It remains uncertain whether the United States will reciprocate by avoiding tariffs on Israeli exports. These tariff changes underscore a broader, indiscriminate phenomenon that could jeopardize Israel’s security in the near future.

The Decline of the Global Order

The gradual erosion of the post-World War II global order is a worrying trend. This period has seen significant conflicts and humanitarian crises but has also been marked by economic growth, elevated living standards, and the unprecedented spread of liberal and democratic ideals. Forty years ago, this global order embraced an extreme form of globalization that, while initially beneficial in terms of affordability of consumer goods, has had devastating consequences. The adverse effects of globalization have disproportionately impacted the working class in developed nations, including the closure of local industries such as the textile sector in Israel, epitomized by the shuttering of the Polgat factory in 2008.

In response to these issues, Trump’s indiscriminate tariff policies aim to stimulate domestic production in the United States. The consequences of globalization have also led to wide-ranging immigration policies that are reshaping demographics, particularly in Europe. The cumulative effect of these developments has fostered a resurgence of nationalist movements worldwide, suggesting that we may only be at the beginning of this trend.

The Shift Towards Mercantilism

Economically speaking, we are witnessing a partial return to mercantilism, which emphasizes maintaining a positive trade balance by prioritizing exports over imports. This international trend carries significant risks for Israel as it navigates a changing economic landscape. Should developed nations increasingly adopt self-sufficiency models, Israel may have no chostart but to follow suit. Preparing for a worst-case scenario is imperative, considering the lack of margin for error in this process.

Given the deep dependence on the United States, particularly under Prime Minister Benjamin Netanyahu’s administration, which has effectively positistartd Israel as a near protectorate of America, the implications are troubling. If the global economy continues to gravitate toward mercantilism that favors local production over imported goods, Israel could face severe challenges and existential threats.

The Urgent Need for Local Production

To mitigate these potential risks, Israel must proactively support local production of all goods that can feasibly be manufactured domestically. The recent struggles to procure the necessary ammunition for the Israel Defense Forces exemplify this urgency. Strategic strength transcends mere military armament; it also encompasses economic resilience and independence.

Despite the successes of Israel’s high-tech industry, reliance on international trade and imports for essential goods—such as pharmaceuticals, vehicles, oil, and raw materials—has increased significantly. The deterioration of relations with critical partners, such as Turkey, further exacerbates these vulnerabilities.

Dr. Netanel Waluch emphasizes that if the global trend persists in favoring local production over imports, Israel must begin to foster local industry, implement substantial stockpiling of non-locally sourced raw materials, and develop a long-term strategy. However, skepticism remains regarding the current government’s ability to enact such a comprehensive and forward-thinking policy.

The evolving landscape of international trade and tariff policies is not merely an economic concern but poses tangible implications for national security. As changes unfold, Israel must adapt to secure its strategic and economic interests in an increasingly unpredictable global environment