The government said that the ’temporary guarantee‘ will ’stop the continued damage’ to Israeli industry.
Israel will implement a tariff rate as high as 146 percent on Chinese aluminum imports entering the country.
In July 2024, the Israeli government launched an investigation into evidence that 25 Chinese companies were flooding their domestic market with artificially cheap aluminum products and putting Israeli producers at a disadvantage. Officials declined to wait for the report’s conclusion and proceeded with anti-dumping levies.
The Ministry of Economic will impose tariffs on imports of aluminum profiles and rods, ranging from 61 percent to 146 percent.
United Nations data indicate that Chinese aluminum exports to Israel, including bars, foils, plates, and sheets, are worth approximately $415 million.
In a May 5 statement obtained by Israeli business newspaper Calcalist, the ministry said it would employ a “temporary guarantee” to “stop the continued damage caused to the local industry.”
Danny Tal, the ministry’s commissioner of levies, defended the move, comparing it to actions to those taken by other countries facing China’s dumping of its subsidized exports. For example, the U.S. government maintains an 86 percent import duty on aluminum imports from Beijing .
“The policy of the ministry and Minister Barkat is to support a free market without barriers and minimal government intervention but with the caveat of protecting local industry from practices of unfair and illegal trade in international markets,” the ministry said.
Ministry officials noted that its new aluminum tariffs highlight the need for nations to “protect their producers from unfair trade if they want to survive.”
The Manufacturers Association of Israel supported the decision, writing on the social media platform X that the nation’s “industry must be protected.”
“This is an essential step designed to protect the local manufacturers that support thousands of families and constitute a critical infrastructure for the construction industry,” the organization said in a May 5 post, according to an English translation.
This comes soon after Israel removed all remaining levies on imported U.S. products.For years, the global economy has experienced aluminum dumping activities by the Chinese Communist Party (CCP).
According to a September 2024 study by the U.S. International Trade Administration, China’s subsidy rate of aluminum exports is as high as 168.8 percent, and the dumping rate—the price lower than its standard value in the exporting market—can be as high as 50 percent.
Because of its price advantage, China increased its aluminum exports by 17 percent last year to an all-time high of 6.7 million tons worth about $40 billion.
In December, China abolished its 40-year-old export tax rebate, a program established to make its products more competitive in worldwide markets. Officials say this policy decision was likely in response to the CCP’s trade practices coming under intense international scrutiny.
The move could lead to higher cost pressures, since advanced and developing economies have relied on cheap Chinese aluminum products.
“Meanwhile, end-users might also have to face higher costs for their raw material, which could be eventually passed on to consumers. This could have an effect on the automotive, construction, and packaging industries,” Inga Fechner, a senior economist at ING, said in a November research note.
However, it could also facilitate a further diversification in international trade.
“In the longer term, this policy change could lead to further shifts in global trade dynamics, benefitting other commodity producers as countries try to diversify their raw material source dependency on China,” she stated.
Meanwhile, U.S. Treasury Secretary Scott Bessent said the United States and China were inching closer to trade negotiations.
“I think we could see substantial progress in the coming weeks. We will see, as I think it’s Stein’s Law, that which is not sustainable doesn’t continue,” Bessent said in a May 5 interview with CNBC. “So 145 percent, 125 percent tariff levels are the equivalent of an embargo.”
Stein’s Law originates from Herbert Stein, an economist who advised former Presidents Richard Nixon and Gerald Ford. Appearing before Congress in 1986, when discussing ballooning trade deficits, he stated that “if something cannot go on forever, it will stop.”
President Donald Trump confirmed to NBC’s “Meet the Press with Kristen Welker” that he could lower levies on China in negotiations for fair trade.
“At some point, I’m going to lower them because otherwise, you could never do business with them, and they want to do business very much,” he said in an interview aired on May 4.
China’s Ministry of Commerce announced on May 2 that it is “evaluating” the White House’s offer to engage in trade discussions.
Recent data suggest Trump’s tariffs are taking a toll on China’s economy, from a sharp slowdown in factory activity to an enormous decline in shipments to the United States.