US-Israel relations are usually described through military assistance and Middle East strategy. The commercial relationship is substantial in its own right. The Office of the United States Trade Representative estimates that two-way trade in goods and services reached $54.2 billion in 2025.
Goods accounted for $34.4 billion of that total. US exports to Israel were $13.7 billion and imports were $20.7 billion. Services added another $19.7 billion, with US services exports rising 10.5% from 2024 and imports of Israeli services increasing 7.2%.
A trade relationship built over four decades
The institutional foundation predates today's technology economy. The US-Israel Free Trade Agreement entered into force in September 1985, making Israel the first country with which the United States signed an FTA. The relationship has since expanded far beyond the goods trade that dominated early agreements.
Services, software, research, venture capital and multinational technology investment now form a large part of the economic connection. That makes bilateral commerce harder to understand through customs data alone.
Technology changes the character of the relationship
Israel's strengths in cybersecurity, semiconductors, enterprise software, defence technology and life sciences overlap with sectors considered strategically important in Washington. US technology companies have long operated research and development centres in Israel, while Israeli startups frequently use American capital markets, customers and acquirers as routes to scale.
This creates a relationship in which commercial and national-security interests can overlap. Cyber tools, chips, artificial intelligence and dual-use technology can be ordinary business products and strategic assets at the same time. Export controls and investment scrutiny therefore matter alongside tariffs.
The numbers show a mixed 2025
USTR estimates total goods and services trade fell 1.7% in 2025. Goods flows declined in both directions, while services expanded. That divergence is useful because it shows why a single headline trade figure can conceal structural change.
A larger services component is consistent with the two economies' strengths in technology, professional services and intellectual property. It also means the relationship is increasingly embedded in companies and research networks rather than only in physical shipments.
Security is important, but it is not the whole economic story
Defence cooperation will remain a defining feature of US-Israel relations, and political disputes can affect the wider relationship. But the commercial architecture has its own history, incentives and institutions.
For American businesses, the relevant question is increasingly how Israel fits into technology supply chains and innovation networks. The $54.2 billion trade total is the clearest reminder that the bilateral relationship cannot be reduced to aid or diplomacy alone.