Israel’s Minister of Economy and Industry Nir Barkat gestures during an interview with Reuters at the 13th WTO ministerial conference, in Abu Dhabi, United Arab Emirates, Feb. 26, 2024. Photo: REUTERS/Abdel Hadi Ramahi

Israel has proposed revamping its four-decade-old free trade agreement with the United States, its economy minister said on Monday, as it looks to head off tariffs from its closest ally.

An upgraded trade pact would ease restrictions on data sharing that would enable significant collaboration, Economy Minister Nir Barkat told Reuters at a conference in Jerusalem.

He said Israel had already agreed to several requests, which included lifting tariffs on US agricultural goods.

Most US goods are already exempt from Israeli tariffs under a 1985 trade deal. The US is Israel‘s biggest trading partner with bilateral trade worth an estimated $37 billion in 2024, according to US trade data. Last year, Israel had a $7.4 billion trade surplus with the United States.

President Donald Trump’s administration this month announced sweeping tariffs on dozens of countries, including a 17 percent levy on Israeli imports, before saying there would be a 90-day pause with a baseline 10 percent tariff on imports to allow for trade negotiations.

Prior to the sweeping tariffs announcement, Israel said it would lift all remaining import duties on US goods and Prime Minister Benjamin Netanyahu met with Trump in Washington.