Smotrich and US Treasury’s Bessent agree to strengthen dialogue on economies
In Washington for first visit under Trump administration, finance minister meets US counterpart; pair declare ‘critical time to shape a new strategic economic future for both countries’
US Treasury Secretary Scott Bessent and Finance Minister Bezalel Smotrich on Wednesday said they agreed to strengthen dialogue and enhance collaboration in a meeting focused on the two countries’ economic partnership.
“This is a critical time to shape a new strategic economic future for both countries, reinforcing American global leadership and Israel’s role as a key economic partner,” the two men said in a joint statement released by the Treasury.
“To advance shared economic interests, both sides agreed to strengthen dialogue mechanisms to enhance collaboration in key areas, including economic policy, technology, and financial regulation,” they said.
The statement underscored the need for a coordinated approach aimed at ensuring bilateral ties remained a source of economic resilience, innovation and mutual benefit.
The finance minister’s trip to Washington marked the first in-person talks between Smotrich, a fervent settler advocate at the helm of Israel’s settlement planning apparatus, and a Trump administration official — and it could have major implications for US policy toward the settlements, which the international community largely considers illegal.
Smotrich maintained a fractured relationship with US president Joe Biden’s Democratic administration, which refused to engage with him and sanctioned more than a dozen Israelis who the administration said acted violently toward Palestinians in the West Bank. The administration considered sanctioning him, but ultimately decided against it.
The Treasury statement Wednesday made no mention of Israel’s banking relationships with Palestinian banks, which had been an irritant between Smotrich and Treasury officials under Biden.
In December, while still under the previous administration, the Treasury welcomed a decision by the Israeli cabinet to approve a one-year extension of its indemnification for Israeli banks, which shields Israeli banks with ties to Palestinian counterparts from anti-terrorism laws, after previously approving just one-month waivers.
Bessent’s predecessor Janet Yellen in May raised public concerns about Israel’s threat to cut off Palestinian banks from their Israeli correspondent banks, potentially severing a critical lifeline for the Palestinian economy.
The extension of the so-called corresponding banking agreement had become a top priority for the Biden administration as the far-right Smotrich’s refusal to sign off on an extended lengthening of the deal risked collapsing the Palestinian Authority.
Smotrich said at the time he agreed to back a one-year extension after securing commitments from the Biden administration that it wouldn’t allow the passage of a UN Security Council Resolution recognizing Palestinian statehood. US officials told The Times of Israel that such an idea would have gone against longstanding administration policy and that they had no problem offering such assurances.
