EU Commission Proposes Suspending Trade Privileges for Israel Over Gaza War

The European Commission has formally proposed suspending preferential trade treatment for Israeli goods under the long-standing EU-Israel Free Trade Agreement, citing ongoing Israeli military operations in Gaza.

The proposal, presented on Wednesday by Commission President Ursula von der Leyen, would revoke the tariff exemptions granted to Israeli exports entering the European Union, affecting billions of euros in annual trade. However, the move currently lacks the qualified majority support required among EU member states for implementation.

“In light of the continued violence in Gaza and mounting concerns over human rights violations, the Commission believes it is no longer appropriate to maintain preferential access for Israeli goods under the existing trade agreement,” said a senior EU official speaking on background.

The EU is one of Israel’s largest trading partners. In 2024 alone, Israeli exports to the bloc totaled nearly €16 billion, including agricultural products such as dates, avocados, and citrus fruits, as well as pharmaceuticals and industrial machinery. Over one-third of these exports benefited from tariff exemptions granted under the 2000 Association Agreement.

According to estimates from the European Commission, the suspension could result in approximately €227 million in additional customs duties on Israeli goods—a significant economic blow.

If adopted, this would mark the first time the EU imposes tangible economic penalties on Israel in response to its military actions, reflecting a growing shift in European public and political opinion amid continued Israeli bombardment of the Gaza Strip.

The proposal faces strong headwinds. Key member states, including Germany, Italy, Hungary, Austria, and the Czech Republic, have historically opposed any form of sanctions against Israel. Their support or abstention is crucial, as a qualified majority is needed for trade-related measures to pass.

The issue is particularly sensitive in Berlin and Rome, where historical and geopolitical ties to Israel remain strong. Diplomats in Brussels say intense lobbying is already underway on both sides of the debate.

In tandem with the trade measure, EU foreign policy chief Kaja Kallas proposed a package of targeted sanctions that includes travel bans and asset freezes on two far-right Israeli ministers, National Security Minister Itamar Ben-Gvir and Finance Minister Bezalel Smotrich, both widely criticized for their inflammatory rhetoric and role in escalating settler violence in the West Bank.

The sanctions list also includes several violent Israeli settlers and ten senior members of Hamas.

However, such sanctions require unanimous approval from all 27 EU member states, a bar seen as exceedingly high, especially given staunch opposition from Hungary, which has already signaled it would veto any measures against Israeli government officials.

If enacted, the suspension of preferential trade terms would represent a serious diplomatic rebuke and a major symbolic blow to Israel. The EU-Israel trade agreement has been a cornerstone of the relationship between Brussels and Tel Aviv since its inception in 2000, seen as a testament to shared values and cooperation.

But in recent months, those values have come under strain. Since the start of Israel’s intensified military campaign in Gaza, European leaders have faced growing pressure, from civil society groups, parliaments, and within their own governments, to hold Israel accountable for civilian casualties and alleged breaches of international law.