Demand for state-backed insurance soars as Israeli exporters fear Trump tariff chaos
State-owned Ashra trade agency says it granted exporters insurance for transactions worth NIS 4 billion in first quarter, versus NIS 1 billion during same period in 2024
Sharon Wrobel is a tech reporter for The Times of Israel
There is a sharp surge in demand by Israeli exporters for state-guaranteed credit risk insurance amid growing fears that the Trump administration’s new tariff policy will ignite a global trade war, Israel’s government-owned foreign trade risk insurance company Ashra said Thursday.
Late on Wednesday, US President Donald Trump announced a 90-day pause on plans to impose tariffs on dozens of trading partners, including Israel, but the future remains uncertain.
“It is still too early to know what the exact implications of the global trade war will be for Israeli exporters and on export volumes to their traditional target markets — mainly the US and Europe — but Israeli exporters are concerned about the increased risks and big uncertainties, and they are looking to cover themselves,” Ashra CEO David Klein told The Times of Israel. “The trade war could affect Israeli exporters directly but even more indirectly as it could harm the economic stability and payment ability of their customers in various countries.”
“This increases the credit risks of Israeli exporters, even if they do not export directly to the US,” Klein remarked.
Trump’s plans for punishing tariffs have shaken a global trading order that has persisted for decades, raised fears of a looming recession, and wiped trillions of dollars off the market value of major firms over the past week.
Israel had hoped to avoid Trump’s sweeping decree to impose levies on global imports announced last week. Instead, it was hit with a 17% tariff despite lifting all remaining duties on US imports in a last-minute attempt to be spared.
During a visit to Washington earlier this week, Prime Minister Benjamin Netanyahu sought to lower or even scrap the tariff imposed on Israel, but Trump refused at the time to commit to rolling back the policy move. On Wednesday, the action was frozen, for the time being.
Klein said that since the start of the year and particularly over the last couple of weeks, Ashra saw a significant increase in demand by exporters seeking state-guaranteed credit insurance for transactions.
“Israeli exporters are facing more risk than before because of the risk of deterioration of relations between Israel and other countries, and therefore they are worried about receiving payments,” said Klein.
In the first three months of the year, the scope of approvals for state-backed credit insurance that Ashra granted to Israeli exporters amounted to NIS 4 billion ($1.06 billion), up sharply from the NIS 1 billion recorded during the same period last year.
Ashra said it received insurance requests for an additional NIS 7.5 billion in export transactions to countries in Africa, Central and South America, and Eastern Europe in areas of security, agriculture, water infrastructure and educational technologies.
“We are seeing an increase in large export transactions in the area of defense because of the war between Russia and Ukraine, and Israel’s fighting with the Hamas terror group, which rapidly fueled demand for defense needs,” Klein noted.
Ashra was established in 1957 to boost exports from Israel by helping to minimize political and commercial risks of global trade. The government-owned company provides credit insurance services to finance large export transactions of Israeli companies, mainly with foreign countries. The insurance protects the exporter or the bank providing the credit against failure to receive payment from the customer due to economic difficulties, including bankruptcies or continued inability to make payments; or a political event.
State-guaranteed credit insurance services allow exporters to receive their money even in the case of a political event that leads to an imposition of a ban or prohibition of money transfers to Israeli companies. Moreover, so-called “pre-shipment” insurance guarantees that in case a customer cancels an order even before it has been delivered, the exporter will receive financial compensation for the expenses that were incurred.
Eligibility for state-guaranteed insurance and financing is conditional on at least 30% of the export deal having an Israeli component. Ashra said it provides Israeli exporters with government-backed coverage offered in major OECD member countries.
The Israeli government backs insurance for a maximum of $3.5 billion worth of export transactions a year. In 2024, Ashra’s insurance portfolio included export transactions of more than $2.5 billion in fields such as industry, infrastructure, medical equipment, energy, communications, agriculture, security equipment, planning and engineering services. Klein estimated that this year, government-backed insurance will amount to $2.8 billion worth of export transactions.
Klein said that given the ample demand, Ashra is already working on increasing the ceiling of state-guaranteed credit insurance for exporters.
“If we see the growth continue, we will seek to increase the ceiling for insuring transactions of Israeli export companies, but for now it is not an urgent matter,” said Klein. “There is a readiness by the Finance Ministry that once we reach 80% of the $3.5 billion, the government will raise the ceiling.”
Klein said that Ashra is working with Israeli exporters to help them expand and diversify their target markets. The export credit agency firm offers insurance of Israeli exports to industrialized and developed countries with a focus on Africa, Southeast Asia, Eastern Europe and South America.
“The risk of tariffs raises concern on the part of Israeli exporters that they will not be competitive enough,” said Klein. “If one big market should close for them, they will look for other markets.”
“Israeli exporters will be trying to look to other countries and new markets that are less affected by the tariffs, such as Africa,” he added.
For Israel, the tariffs, if they move forward, apply primarily to exports of goods such as machinery, electrical equipment, medical and optical instruments, chemicals, diamonds, and transportation products, while software services are not included.
Israeli exports will take an annual $2.3 billion hit from the tariffs if they remain at 17%, and between 18,000 and 26,000 Israelis could lose their jobs, according to estimates by the Manufacturers Association of Israel. The US is Israel’s single largest trade partner, and in 2024, it imported more than $13.5 billion worth of goods from Israel.
Times of Israel staff contributed to this report.
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