The European Union’s announcement that it is reconsidering its trade agreements with Israel could deal a serious blow to the Israeli economy, as EU member states are Israel’s largest trading partners.
In 2024, trade between Israel and the EU reached €42.6 billion, with Israeli exports to the EU totals at about €16 billion.
If Israel’s trade agreements with the European Union are indeed reconsidered, Israel’s exports worth €16 billion could theoretically be at risk. Trade with EU member states accounts for about one-third of Israel’s global commerce, and Israeli exports to the EU include a substantial volume of products for the automotive and chemical industries, among others.
Ursula von der Leyen during her visit to Eastern Europe. Photo: AP
A major challenge for the Israeli economy
In practice, it is difficult to imagine the EU limiting civilian trade with Israel other than by imposing tariffs on imports of Israeli goods, but even that poses a significant challenge for the local economy. Israeli imports from the EU totaled about €27 billion in 2024, and it is unlikely that the bloc would act against its own basic interest in exporting goods to Israel. However, the picture looks different when it comes to imports from Israel into the EU.
For now, it remains unclear exactly what sanctions European Commission President Ursula von der Leyen has announced, and there is no certainty that they will cause significant disruption to Israel-EU trade. However, when it comes to research partnerships, the EU’s move carries weight. One notable example is Horizon Europe, a major research initiative in which Israel participates. The program provides funding for Israeli research and links Israel’s databases and studies with those of global projects, enhancing the quality and competitiveness of Israeli research.