Israel’s Chinese Goods Surge: A Warning and Opportunity for the U.S.

Chinese goods have flooded Israel’s consumer market. This deluge threatens Israel’s future and the U.S.-Israel relationship.

But there’s time to make it work to the West’s advantage.

The Chinese Communist Party has proven that its cheap trade policy not only competes with the U.S. and its allies, but buys the softness of its customers’ economic elites and politicians. The trade policy is part of an influence strategy to weaken resistance worldwide to Chinese encroachment.

In 2023, the year of the Sabbath Massacre, Israelis imported $10.7 billion in CCP-controlled products. As Israelis chose Chinese brands for nearly a fifth of their new automobiles and nearly 70 percent of their electrical vehicles, China expanded its military footprint in the Middle East.

For the first time, in April and May of this year, China flew air force maneuvers with Egypt, and landed military cargo aircraft in Syria in June. It beefed up its army presence in Africa and its naval presence on the Red Sea. It strengthened its support for Yemen. And it has greatly improved the Islamic Republic of Iran’s military capabilities, providing ballistic missile and drone technology. Beijing also keeps Iran’s economy alive, helping the regime avoid sanctions as the buyer of 90 percent of Iranian oil exports.

While China militarily backs Israel’s enemies, adversaries, and fair-weather friends, it makes Israelis more and more dependent on its supply chain.

Israel can learn from countries as varied as Saudi Arabia, India, and Vietnam, which have chosen to strengthen ties with the United States rather than China.

Israel is a leader in technological innovation. It should be an ally in President Donald Trump’s trade war. Jerusalem should be boycotting China for supporting its Hamas and Fatah and Iranian regime enemies, not rewarding it.

Israel lacks a large consumer manufacturing export base. Its high fuel taxes, which drive gasoline to more than $8 per gallon at the pump, plus tariffs, discourage imports of American cars. Meanwhile its generous, 34 percent tax incentives on purchasing electric vehicles encourage the Chinese EV flood and all the debris such floods bring.

This is a strategic error that threatens Israel’s survival. Chinese goods, embedded with sensors and connectivity, expose all customers everywhere to threats never experienced.

Before long, one in five cars in Israel will serve as mobile sensors for the Chinese Communist Party and for anyone with whom the CCP chooses to share its imagery and data. Given the spectacular intelligence op that Israel ran against Hezbollah with the pagers, one wonders what the CCP could do with its electronic exports to Israel. Or to the United States.

Even a remote EV kill switch could block Israel’s main roads instantly in a moment of crisis, shutting down IDF mobilization on command. This isn’t fantasy. A British court ruled in 2023 that the Chinese-made SIM cards in EVs were devised, under Beijing’s National Intelligence Law, to the specifications of the Ministry of State Security – the CCP’s internal and foreign intelligence service.

American-made EVs, while more expensive, present no such threats. That is, as long as their technological supply chains don’t begin in China.

And then there are the traditional supply chains on which our country and much of the world are so dependent – critical minerals, solar cells, and batteries – which expose Israel to new disruptions.

American energy technologies offer secure and, yes, carbon-free alternatives.

Israel’s penny-wise choice is dollar-foolish. It sacrifices long-term security and autonomy for short-term savings. It ignores the peril of ceding sovereignty and security to a hostile power.

Israel’s dilemma is little different from most of the world when choosing between cheap and increasingly high-quality Chinese goods over more expensive Western ones. Israel’s small size, though, makes it especially vulnerable to, and dependent on, the CCP.

Which brings us back to a trio of very different countries that show ways forward. In April, Saudi Arabia set the precedent by favoring an American nuclear energy partnership over China’s advanced capabilities. Earlier, India banned Chinese apps and favored American semiconductors. Vietnam signed trade agreements in 2023 to favor American energy technology over cheaper Chinese alternatives.

These deals benefit the customer countries by providing economic and strategic autonomy. Israel can do the same. With its innovations in cybersecurity, energy tech, and AI, it can partner with the U.S. to reshape global trade to the American advantage.

The Trump administration can seize this opportunity to dominate the trade war. A free trade agreement with Israel, like the agreements with India, would go a long way. Strategic supply chains would reduce both countries’ dependence on China. Israel’s tech prowess can drive innovation in secure batteries and renewables, cutting dependence on Chinese minerals and products. The U.S. and Israel can benefit mutually in commercial nuclear power technology for export, at China’s expense.

The U.S.-Saudi nuclear “gold standard,” applied to Israel, can align Jerusalem with American security goals to ensure against nuclear proliferation and reinforce Western unity against the heirs of Chairman Mao.

Saudi Arabia’s nuclear deal prioritizes U.S. reliability over China’s scale, India’s tech bans bolster sovereignty, and Vietnam’s trade shift enhances economic resilience. Israel, with its tech edge, can amplify these successes, becoming a hub for U.S.-led innovation to counter China in ways their militaries cannot.