Israel is among the first countries to react ahead of US president Donald Trump’s tariff announcement in his much awaited “Liberation Day” speech.

On Wednesday, one of the most important allies of the US cancelled import duties on all American goods with an executive order issued by finance minister Bezalel Smotrich and economy and industry minister Nir Barkat. The order was issued under the directive of Prime Minister Benjamin Netanyahu.

“Cancelling the customs duties on American goods is an additional step in the policy that my governments have led for a decade in opening up the market to competition, introducing variety to the economy and lowering the cost of living,” Netanyahu wrote in a post on X.

The US is Israel’s largest trading partner and also one of its closest allies. As of 2024, the export of goods to the US stood at $17.3 billion, while the export of services was at $16.7 billion.

According to the Israeli Prime Minister, reducing tariffs will strengthen strategic relations between the two countries and may help reduce the cost of living in Israel.

The UK, another key US ally, said that the country was “prepared for all eventualities” when it comes to looming US tariffs, with no response ruled out.

In response to a question, Prime Minister Keir Starmer said: “Let me be clear with the house, a trade war is in nobody’s interest, and the country deserves, and we will take, a calm, pragmatic approach. That is why constructive talks are progressing to agree a wider economic prosperity deal with the US.”

In a contrasting move, China, Bloomberg reported, initiated steps to restrict local companies from investing in the US in a move that could give Beijing more leverage for potential trade negotiations with the Trump administration.

The report said, several branches of China’s top economic planning agency, the National Development and Reform Commission, have been instructed in recent weeks to hold off on registration and approval for firms that are looking to invest in the US.