The bloc accounts for 32 per cent of Israel’s global trade and the new measures mark a significant change in Brussels’ approach to confronting allies
September 17, 2025 13:05
The European Commission has announced its intention to downgrade trade ties with Israel and sanction two of its ministers in what amounts to the bloc’s strongest action yet over the war in Gaza.
The proposed measures, announced Wednesday by EU foreign policy chief Kaja Kallas, include tariffs on €5.8 billion worth of Israeli imports, the suspension of €20 million in direct EU support for Israeli state-linked projects – with an exemption for civil society projects and Yad Vashem – and the imposition of sanctions on far-right ministers Itamar Ben-Gvir and Bezalel Smotrich.
Kallas said the intention of the measures was “not to punish Israel” but rather to “improve the humanitarian situation in Gaza”.
However, attempt to curb trade ties with the Jewish State is understood to be unlikely to pass due to insufficient support from key EU member states.
In her State of the Union address last week, President of the European Commission Ursula von der Leyen called for a suspension of free trade between the EU and Israel over Europe’s “painful” inability to agree upon a response to the humanitarian crisis in Gaza.
She also criticised plans for the expansion of settlements in the West Bank and recent violence by extremist Israeli settlers, which she said acted as a “clear attempt to undermine the two-state solution.”
In response to the announcement on Wednesday, Israeli Foreign Minister Gideon Sa’ar accused von der Leyen of “empowering terrorists”.
With an annual exchange of goods and services worth £59 billion, the European Union is Israel’s biggest trading partner, accounting for some 32 per cent of Israeli global trade. Israel represents less than one per cent of the EU’s trade.
The current free-trade area between Israel and the European Union came out of the EU-Israel association agreement signed in 2000. If adopted, the measures would alter more than two decades of EU-Israel economic cooperation and signals a greater intent by Brussels to confront allies over humanitarian concerns.
The EU proposals come months after the UK unilaterally suspended talks on a free trade agreement with Israel and placed sanctions on Ben-Gvir and Smotrich.
However, the Foreign Office confirmed that the measures against the duo, which included travel bans, were connected to their alleged “incitement” of violence in the West Bank, not the Gaza War, and were imposed on them in their personal capacities, not in their roles as ministers.
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