The United States and Israel have sealed a new agricultural trade agreement in December 2025, making permanent modifications to their previously established trade framework while extending certain provisions through the end of 2026. The deal represents a significant evolution of the trade relationship that began with the US-Israel Free Trade Area established in April 1985 under Public Law 99-47.
New agricultural provisions take center stage in the agreement, which maintains protections for 27 sensitive Israeli agricultural products including fresh eggs, cheese, apples, and wine. These protections won’t last forever, though — quotas will increase by 2% annually until reaching zero tariffs in 2035, according to details outlined in the agreement.
“The new agreement is a significant step toward lowering the cost of living in Israel and strengthening strategic ties with the US – our most important economic and political partner,” said Economy Minister Nir Barkat, highlighting the dual economic and diplomatic importance of the deal.
What’s in it for American producers? Israel has committed to granting tariff exemptions to approximately 300 US food sector items starting January 1, 2026. The list spans beef, poultry, dairy, vegetables, and fruits, though 28 products will remain excluded with graduated protections until 2035, as detailed in bilateral trade documents.
Agricultural Quotas Expanded
The agreement specifies precise duty-free access quotas for Israeli agricultural products entering the US market in 2026. These include 466,000 kg under U.S. note 3, 1,304,000 kg under note 4, 1,534,000 kg under note 5, 131,000 kg under note 6, and 707,000 kg under note 7, according to a statement published by Texas agriculture officials.
The previous agricultural agreement has been extended through December 31, 2025, maintaining the 2008 duty-free import quantities for products listed in Annexes B, C, and D. “In order to allow more time for this review, I have the honor to confirm the following understanding between our Governments that, effective as of this date: 1. The Agreement, its annexes, and attachments, with modifications as noted in this letter, will remain in force through December 31, 2025,” states official documentation from the US government.
The White House formalized the agreement through a proclamation on December 29, 2025, implementing the US-Israel agricultural trade agreement along with technical modifications to the Harmonized Tariff Schedule of the United States (HTSUS), as reported by market analysts.
Political Dimensions
The agreement has not escaped political framing. “Thanks to President Trump’s leadership, the United States and Israel have finalized a sweeping agricultural trade agreement aimed at cutting…” reads a statement from Texas Agriculture Commissioner Miller, who praised the deal’s tariff reductions.
But it’s not all smooth sailing. The agreement includes provisions requiring Israel to subsidize US wheat imports despite their higher cost and reportedly lower quality compared to Eastern European sources. This subsidy is estimated to cost tens of millions of shekels annually, creating a potential strain on Israeli finances.
“We are negotiating intensively and obviously we would like to go back to zero tariff, and duty-free access for all Israeli exports but that is currently not realistic,” said Perel, indicating the compromises made during negotiations.
The agreement marks another chapter in the evolving trade relationship between the two nations that began nearly four decades ago, with both sides claiming wins while making concessions that reflect the complex nature of international agricultural trade in an era of shifting global alliances.
