U.S. merchandise trade with Israel has seen a significant increase in the first two months of 2024, reaching the fastest start in nine years. The main reason for this spike is a substantial 962.24% rise in a category of U.S. exports that includes weapons and related parts. Even though the total amount is $370.18 million, it is only a fraction of the annual military aid provided to Israel by the U.S. government. This growth in trade with Israel began in October of the previous year and has been steadily increasing since then.
The increase in U.S. exports to Israel in the weapons category has skyrocketed after the Hamas terrorist attack in October of last year. The monthly average of exports before the attack was $22.66 million, while in the five months following the attack, it increased to $166.27 million per month. Israel now accounts for over half of these exports, a significant increase compared to previous years. Ukraine, on the other hand, has seen a decline in U.S. exports in this category, falling from ninth place to 22nd place due to a 78.38% decrease in shipments.
The U.S. House of Representatives recently approved a bill to provide military aid to Ukraine, Israel, and Taiwan, as well as humanitarian aid to Gaza. The total exports to Israel in February were $215.44 million, coming close to surpassing diamond exports, which have traditionally been the highest U.S. export to Israel. The rise in weapons exports to Israel has offset the decline in diamond exports, resulting in an overall increase of $559.35 million in U.S. exports to Israel.
While U.S. imports from Israel have seen a slight increase of 1.79%, diamond trade has decreased. Imports from Israel have fallen by $241.50 million in the first two months of the year. There has been a rise in computer chip imports from Israel, adding $265.92 million to the total imports. Overall trade between the U.S. and Israel has increased by 11.12% through February, showing a positive trend in economic relations between the two countries.
JFK International Airport remains the primary gateway for U.S. trade with Israel, mainly due to the diamond trade that thrives in New York City. However, the dominance of JFK has decreased over the years, with other airports and seaports gaining a share of the trade. In 2024, JFK accounts for 37.32% of U.S. trade with Israel, while other ports like the Port of Wilmington in Delaware and North Carolina are also significant contributors. These ports combined make up 98% of the total trade in the munitions category, reflecting the diversification of trade routes between the U.S. and Israel.
