Is it permissible to be dishonest with a non-Jew? Might there be a difference between outright lying as opposed to withholding the truth? Is there any difference between a non-Jewish monotheist as opposed to an idolater?
It is forbidden to be dishonest with anybody, directly or indirectly, Jew or non-Jew, monotheist or not. In situations where lying would be the only way to prevent unwarranted danger or harm, it would be permitted to lie, even to a Jew. But we’re clearly not talking about that type of extreme scenario, but rather the myriad situations which commonly arise in society.
Many Jewish teachings explicitly illustrate this point. I’ll present just a few:
Regarding the prohibition of outright lying, the Talmud states: “It is forbidden to deceive your fellow creatures, even a heathen, for there is in this a sin, inasmuch as we are obliged to speak words of truth, for this is one of the foundations of the soul” (Tractate Chullin 94a).
In addition, just withholding the truth is also forbidden. The Midrash relates a story about Rabbi Shimon ben Shetach who purchased a donkey from an Ishmaelite. A precious stone was later found hanging on the donkey’s neck and people ascribed to this the verse, “The blessing of G-d makes one rich” (Prov. 10:22). But the Rabbi responded, “A donkey I purchased, a precious stone I did not!” So he went and returned the gem to the Ishmaelite who exclaimed, “Blessed is the L-rd, the G-d of Shimon ben Shetach!” (Deut. Rabbah 3:3).
Similarly, some Talmudic Sages purchased wheat from non-Jews and found in the wheat a bundle of money. They returned the money to them, and the heathens said, “Blessed is the G-d of the Jews!” (Jer. Talmud, Baba Metzia 2:5).
Both of these stories indicate not only that it’s wrong to be only passively or indirectly deceitful with non-Jews, but furthermore, considering that these teachings apply to the non-Jews of Talmudic times who were heathens, they demonstrate that there is no distinction between monotheists and idolaters on this account.
Rather, by being honest in all our affairs with every human being, we bring about a sanctification of G-d’s name in the world!