U.S. Customs Duty on Exports from Israel: 12.5% Under Section 301 from 24.7.2026

U.S. customs duties on exports from Israel increased on 24.7.2026. Since then, most goods originating in Israel are subject upon entry into the U.S. to an additional duty of 12.5% under Section 301 of the U.S. Trade Act of 1974, on top of the regular duty. The duty is levied on the U.S. importer, but it directly affects the Israeli exporter's price. The U.S.–Israel Free Trade Area Agreement does not provide an exemption. Goods subject to duties under Section 232, such as steel or auto parts, and products on the exemption list, are not subject to this duty.

• Effective date: 24.7.2026, at 00:01 U.S. Eastern Time.

• Applies to: Most goods originating in Israel and entered for consumption in the U.S.

• Rate: 12.5%, in addition to the regular duty under the U.S. Harmonized Tariff Schedule.

• Exemptions: Goods subject to duties under Section 232, and the tariff numbers listed in the annex to the presidential executive order.

• Legal basis: Section 301 of the U.S. Trade Act, following an investigation into the absence of a ban on importing goods produced with forced labor.

• Official source: USTR notice in the Federal Register dated 28.7.2026.

The 12.5% duty replaced a blanket 10% duty under Section 122, which expired on 24.7.2026. According to a review by the Foreign Trade Administration at the Ministry of Economy, this is the third round of broad-based tariffs on Israel since April 2025:

1. April 2025: "Reciprocal" tariffs under the emergency statute IEEPA. Israel was effectively subject to 10%, rising to 15% from August 2025.

2. February 2026: The U.S. Supreme Court ruled that the "reciprocal" tariffs had been imposed unlawfully.

3. 24.2.2026: A 10% duty on all countries under Section 122, limited to 150 days.

4. 12.3.2026: The U.S. Trade Representative (USTR) opened 60 investigations under Section 301.

5. 5.6.2026: A proposed duty of 10% or 12.5%, depending on the country, was published.

6. 24.7.2026: The duty took effect. Shipments loaded onto a vessel and dispatched before the effective date, and entered for consumption before 28.7.2026, were not charged.

Israel is in the 12.5% group — countries that, according to the U.S. determination, do not ban the import of goods produced with forced labor. A 10% duty applies to countries that have such a ban but enforce it inadequately, or that have committed to establishing one in a trade agreement with the U.S. The Ministry of Economy stated that it is working with the U.S. administration to reduce the tariffs. According to reports, lawsuits have been filed against the tariffs in the U.S. Court of International Trade, and the proceedings are still pending.

The duty is determined by the country of origin of the goods, not by the identity of the exporter or the country from which they were shipped. A product manufactured in Israel and sold through a distributor in Europe is still a "product of Israel" for this purpose, while a product manufactured in another country that merely transited through Israel is assessed under U.S. rules of origin. These questions fall within the field of rules of origin and trade agreements.

The Free Trade Agreement Does Not Exempt

The USTR notice explicitly states that goods eligible for preferential tariff treatment under U.S. trade agreements are subject to the additional duty. A certificate of origin under the agreement with Israel still saves the regular duty on the product, but not the 12.5%.

What Is Exempt

Goods subject to duties under Section 232 pay the sectoral duty rather than the Section 301 duty. Currently, this includes, among others, steel, aluminum, copper, vehicles and auto parts, and certain patent-protected pharmaceuticals. The list of exempt tariff numbers appears in the annex to the presidential executive order, starting on page 16. For some items, the exemption depends on end use, primarily aircraft components and pharmaceuticals (pages 20–25 of the annex). Civil aircraft, their engines, and parts that meet the conditions of the U.S. Harmonized Tariff Schedule are also exempt.

The review starts with the U.S. tariff classification number for each product, as it determines whether an exemption applies:

1. Check the U.S. tariff classification number (HTS) of each product against the exemption list in the annex to the presidential executive order.

2. Check whether the product is subject to Section 232. If so, the sectoral rate applies instead of the Section 301 duty.

3. Verify the country of origin under U.S. rules, especially when part of the manufacturing takes place outside Israel.

4. Check the sales agreement to determine who bears the duty. In a DDP sale, you are the importer of record in the U.S. and pay the duty yourself.

5. If the agreement contains a price-adjustment mechanism for tariff changes, check how it applies to the 12.5%, and to any refund of the "reciprocal" tariffs that the importer received or will receive.

6. Monitor any changes to the rate applicable to Israel and the outcome of the lawsuits pending in the U.S. Court of International Trade.

The U.S. entry declaration is filed by the importer or its customs broker. On the Israeli side, certificates of origin and trade agreements are handled at our firm by Adv. Udi Assa, who worked from 2011 to 2022 in the Legal Department of the Customs and VAT Division at the Israel Tax Authority.