Opinion

Trump and Israel: It's About More Than Settlements

The president-elect’s economic policies risk the international economic order that has benefited the Israeli economy so much.

An ultra-Orthodox Jewish man walking next to a poster of Donald Trump in Jerusalem's Mea She'arim neighborhood, October 2016.
Amir Cohen/Reuters

A lot of Israelis, including many who should know better, are going to be shedding tears of joy on Friday as they watch Donald Trump sworn in as president of the United States. For them, it not only signals the end of eight bad Obama years, but – if you can believe everything you’ve heard from the president-elect and his acolytes – the U.S. Embassy will soon be moving to Jerusalem, the White House will look the other way as settlements grow, Palestinian aspirations will get short shrift and the Iranian nuclear agreement will be ripped up.

Anyone who has been watching the process of appointments to key positions in the incoming administration should be starting to have some doubts about how much of this hyper-pro-Israel agenda will survive the realities of Washington and international politics. But at least the Israeli right can take comfort in knowing that Trump’s heart (if he has one) is in the right place: Among all the countries in the world, the president-elect seems to have kind words only for Russia and Israel.

Alas, Israel and its security isn’t just about settlements, stiffing the Palestinians and keeping nukes out of Iranian hands. Israel is part of the international order of liberal trade and immigration policies presided over by the United States, and we have benefited greatly from it. The system is already under assault and, if Trump is to be taken at his word, it could be brought to its knees.

Trump’s two big economic issues were trade and immigration. He has lashed out at China and Mexico for taking away American jobs, and is threatening to slap bigger tariffs on imports and other punitive measures. His attacks on immigration were racist, but at heart they were economic – that immigrants were taking jobs away from Americans and pushing wages lower.

On the surface, neither would seem to have much to do with us. Israel didn’t come in for special attention from Trump because we’re not a big enough exporter to have any effect on the U.S. job market. But the talk is that Trump is mulling raising tariffs across the board – and close to 30% of what Israel sells abroad goes to the United States. As it is, we’re already struggling with an overvalued shekel that makes our exports less price-competitive. Factor in tariffs and Trump’s clear “Buy American” bias, and the outlook for exports to America looks poor.

Israel has been gradually rebalancing with its exports to Asia, but the process is going slowly and Trump threatens that, too. A trade war with China, as Trump’s policies seem to be heading, would hurt the Chinese and U.S. economies, and could send both into a recession if things get really nasty.

If Trump’s attitude on trade spreads to other countries, it could lead to an overall decline in global trade. With 40% of our gross domestic product generated from exports, a scenario like that is very dangerous.

Immigration seems an even more remote issue for Israelis. After all, the only border walls we have to deal with are the ones we built to keep Palestinians out. But the fact is that Startup Nation is highly reliant on the free flow of Israelis between Silicon Valley and other U.S. tech centers. Tens of thousands of Israelis work in the United States for Israeli startups that need to be close to their prime market. Others are acquiring training and skills working for U.S. firms and universities that they bring back to Israel. If Trump makes good on his word to crack down on visas for skilled workers, this system could all come crashing down.

Maybe Israel would benefit from Israeli refugees from Silicon Valley returning home, but the damage would more than outweigh the benefits.

A lot of other Trump policies run contra to Israel’s deep interests. The global efforts to tackle climate change that Trump has disparaged benefit Israel by creating new markets for energy technology and weakening the grip of the world’s oil powers. Trump’s attitude that America’s allies should be treated like business partners who have to pay their own way endangers the very generous military aid Israel gets and the joint projects – like the Arrow missile – done collaboratively.

All of these things are far more important to Israel than having the U.S. Embassy decamping to Jerusalem or building another settlement. These things are beloved of the right because it values symbols over substance, and takes for granted that the Israeli economy is prosperous enough to create jobs, raise the standard of living and provide the government with the tax revenues it can lavish on settlements, among other things.

There are good odds that Trump will backtrack on the core of his economic policies as he learns that the real world is more complicated than a tweet. But, dear Israeli and Jewish Trump fans, those hard lessons about economics may well be the same kind he learns about embassies and settlements.