Israeli finance minister: We’ll cancel the trade agreement with Ankara and increase duties by 100% on imports

Israeli Finance Minister Bezalel Smotrich said Israel will cancel the free trade agreement with Türkiye and impose 100% tariffs on imports from Türkiye in response to Turkish President Recep Tayyip Erdogan’s decision to stop exports to Israel.

Israeli media, based on a statement by Smotrich, reported that the plan would be presented to the cabinet for approval.

In his statement, Smotrich said Erdogan’s announcement to stop exports to Israel was a declaration of economic boycott and a serious violation of international trade agreements to which Türkiye has committed.

He said the Israeli measure would only be implemented while Erdogan was in power.

Erdogan said in March he would not seek re-election when his term ends in 2028.

“If Turkish citizens elect at the end of Erdogan’s term, a sober leader who is not hating Israel, it is possible to return to the trade route with Türkiye,” Smotrich said.

Under Smotrich’s plan, all reduced tariffs applied to goods imported from Türkiye into Israel would be eliminated under the free trade agreement.

At the same time, any product imported from Türkiye to Israel is charged 100% of the value of the goods, in addition to the current duty rate.

The Israeli government’s ministries of finance, economy and foreign affairs will also take steps to boost industrialization in Israel, while diversifying import sources to reduce dependence on Türkiye.

The Israel Manufacturers Association called Smotrich’s plan an appropriate response because Erdogan wasn’t allowed to damage the Israeli economy without a response.

In early May, Türkiye halted all exports and imports to and from Israel, attributing this to the worst humanitarian tragedy in the Palestinian territories.

Turkish Trade Minister Omer Polat said the suspension of trade with Israel would continue until a permanent ceasefire was declared and the flow of humanitarian aid to Gaza was secured.

Speaking as he released April trade data, Polat said Israel’s tough stance and deteriorating situation in Gaza had prompted Türkiye to suspend trade with it.

According to Turkish local newspaper, Doğru Haber, Türkiye’s complete cessation of trade dealings with Israel will cost the latter a lot, and this is what worries the Israelis and prompts the US administration to intervene to dissuade Türkiye from its decision.

In an article on the Turkish newspaper, Israel can secure what it used to import from Türkiye through other countries, but this will cost it much more, because Turkish goods are cheaper, and shipping them to Israel is less expensive, due to the proximity of the distance.

Moreover, Israel’s need for Türkiye far exceeds the goods it imports from.