Israel is pressing the US administration for an exemption from the high customs duties on aluminum and steel products announced by US President Donald Trump.
Sources inform "Globes" that the Ministry of Economy and Industry Foreign Trade Administration asked the International Trade Administration in the US Department of Commerce to exempt Israel from the restrictions on exports of steel to the US market.
Israel's official reason for the request is that its metal exports to the US are marginal, totaling $25 million a year, and pose no threat to the US economy. At the same time, the requests states that limiting aluminum and steel exports from Israel to the US and setting high customs duties will affect dozens of small and medium-sized companies operating throughout Israel.
The reform announced by Trump in recent weeks is designed to protect US industry mainly against massive metal imports from China. He signed orders imposing 25% customs duties on steel and 10% customs duties on aluminum. Trump explained that his measures were a "response to a security threat" posed by large-scale metal exports leading to the closing down of enterprises in the US.
The restrictions became effective temporarily late last week, and are due to take permanent effect in early May. Under Trump's orders, six countries - Canada, Mexico, Brazil, South Korea, Argentina, and Australia, plus the European Union - will be exempted from the restrictions, at least in the coming weeks.
Industrial sources had difficulty assessing the reasons that led Trump to exempt these countries from the new reform. "It is reasonable to assume that the US administration has a special interest in exempting each one of these countries from the customs duties reform at this stage. At least until early May, he will try to get something in exchange from each one of them," an industrial source predicted.
"At this stage, it is very difficult to assess the chances that the US administration will grant Israel's request. The chances look 50-50 right now, and it is likely to take several weeks before a decision is made one way or the other," the source said.
The Israel Metal Industries Association in the Manufacturers Association of Israel said that 50-60 companies in Israel would be affected by the high customs duties on steel and aluminum in trade with the US. According to the Metal Industries Association's figures, exports of steel products to the US market totaled $21 million in 2017, and exports of aluminum products totaled $3-4 million. "The quantity of exports is purely marginal, and poses no threat to the US market, but stopping it will deal a hard blow to dozens of Israeli companies.
"The US should exempt us from this measure in the name of friendship between the two countries and our common interests," a senior Manufacturers Association source said.
Industrial sources told "Globes" late last week that in addition to the official request to the US administration by the Ministry of Economy and Industry, the Israeli embassy in Washington was also active in the matter, as well as the American Israel Public Affairs Committee (AIPAC), the US lobby for Israel in the US.
In an appeal by Manufacturers Association president Shraga Brosh in recent days to leading members of the US Jewish community and AIPAC, he commented on the increased customs duties on metal exports to the US, writing, "This unilateral measure is liable to have a negative impact on trade between the two countries, and to create difficulties in doing business. In our opinion, Israel should not be put in the same category of large exporters of steel and aluminum as India and China."
Published by Globes [online], Israel Business News - www.globes-online.com - on March 25, 2018
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