Overview: Due to the Gaza War, the UK halts trade negotiations.
In reaction to Israel’s military activities in Gaza and the growth of illegal settlements in the West Bank, the United Kingdom has suspended free trade talks with the country.
Foreign Secretary David Lammy’s announcement of this action reflects mounting dissatisfaction with Israel’s behavior around the world.
However, what is the size of Israel’s international commerce and which nations are its main trading partners?
This study examines Israel’s exports, imports, and the financial effects of current diplomatic tensions.
Important Trade Data (2024)
Imports in total: $91.5 billion
Exports in total: $61.7 billion
Deficit in Trade: $29.8 billion
Israel imports petroleum, automobiles, and machinery and exports primarily electronics, diamonds, and pharmaceuticals.
Leading Nations That Trade With Israel
Israel’s Top Exports to the US: Diamonds, Electronics, and Pharmaceuticals ($17.3B)
Integrated circuits (Intel chips) in Ireland ($3.2B)
Hong Kong ($2B) + China ($2.8B) = $4.8B total – chemicals, optics
India ($2.5B): equipment and chemicals
Netherlands ($2.1B): Tech components and diamonds
Israel’s Top Import Sources
China ($19B) – EVs, phones, computers
United States ($9.4B) – Weapons, diamonds, tech
Germany ($5.6B) – Cars, pharmaceuticals
Switzerland ($4.8B) – Precision instruments, drugs
Italy ($3.9B) – Machinery, fashion goods
Why Did the UK Put a Stop to Trade Negotiations?
Since October 2023, more over 40,000 Palestinians have been murdered in the Gaza War.
Settlements on the West Bank: UK declares growth “illegal and destabilizing.”
Current Trade: The UK exports $1.57 billion in diamonds and technology and imports $1.96 billion in jet engines and medications from Israel.
EU Examining Trade Partnerships
A reevaluation of trade relations with Israel across the union was acknowledged by EU foreign policy leader Kaja Kallas.
What Are the Main Exports from Israel?
Electronics & Machinery ($18 billion): military technology, Intel processors
Teva generics in Chemicals & Pharmaceuticals ($10B)
Diamonds & Jewelry ($9B): The world’s largest supplier of cut diamonds
Medical Equipment ($7B): Surgical instruments and imaging equipment
Oil & Minerals ($5B): Potash and refined petroleum
The Potential Economic Impact of Sanctions on Israel
Trade restrictions from the UK and EU could disrupt over $5 billion in annual trade.
Ireland, Intel’s EU base, is a significant buyer, putting the tech sector at danger.
The diamond industry is susceptible to supply shifts from Belgium, India, and the UAE.
Questions and Answers (FAQs)
1. What makes Ireland one of Israel’s top buyers?
Ireland imports $3 billion worth of Israeli microchips, which are supplied to EU markets by Intel’s Kiryat Gat plant.
2. Does Israel’s military spending benefit the US?
Yes, $3.8 billion in military aid is used annually to help pay for some of the US’s weapons exports to Israel.
3. If sanctions increase, might trade with China supplant that with the West?
Partly—Israel still imports 20% of its goods from China, but it still depends heavily on the US and EU for technology.
4. What will happen to Israel’s economy next?
In the short term: minimal effect (US commerce remains robust).
Long-term: The tech and diamond industries may suffer if EU sanctions get worse.
Conclusion: A Changing Environment for Trade
Despite being vulnerable to Western sanctions, Israel’s economy is nonetheless strong. The economic effects of the war are only getting started, as the UK has frozen trade discussions and the EU is reevaluating ties.
Will additional nations stop doing business with Israel? Stay tuned for further information as diplomatic demands mount.