Israeli trade officials said they were optimistic that trade relations with the United States would remain strong during a Trump presidency, even though Donald Trump himself came out strongly against trade pacts and other policies that he said hurt American industry.
“Trump spoke about the need for change and now everyone’s waiting to see the operative meaning of his words,” said Anat Katz, Israel’s commercial attache in Washington.
“Trump never said a word about the trade agreement with Israel and the agreement is very different than the trade agreements that were the focus of his campaign,” she said about the free-trade agreement Israel signed with the U.S. more than 30 years ago. “He spoke about agreements that were perceived as coming at the expense of blue-collar workers,” a reference to the North American Free Trade Agreement and trade with China.
Trump’s victory in the U.S. election sent shock waves through industries that rely on open trade, from airlines to cars and IT outsourcing, even though many executives remain unsure what his protectionist rhetoric will mean in practice.
Throughout his presidential campaign, Trump vowed to revive the U.S. economy by slashing taxes, preventing companies from making products overseas, renegotiating trade accords and imposing tariffs on imports from countries like China.
Although its share has declined in recent years, the U.S. is Israel’s biggest export customer after the European Union. Last year, Israel exported about $19 billion to the United States, not counting polished diamonds, accounting for about 27% of total exports of goods and services, according to the quasi-government Israel Export Institute.
In the first half of this year, merchandise exports dropped about 3% to $5.4 billion, mainly due to declines in exports of pharmaceuticals and electronic components.
Tzahi Malach, CEO of Ashra, the Israel Foreign Trade Risks Insurance Corporation, said there was likely be a boost for Israeli pharmaceutical products, defense equipment and luxury goods, although he conceded the dollar may lose value against the shekel in the wake of Trump’s victory.
A stronger shekel would make Israeli exporters less price-competitive, but yesterday the U.S. currency held its own against the shekel on foreign currency trading. Israeli pharmaceutical stocks rallied after the threat of a crackdown on drug prices that Hillary Clinton had vowed was removed by Trump’s election victory.
Shares of Elbit Systems, Israel’s biggest defense contractor, were also up sharply, closing 2.7% higher at 379.40 shekels ($99.41).
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