EC proposes suspension of trade discounts for Israeli goods Germany, Italy remain unconvinced

The European Commission has proposed reinstating duties on Israeli goods in response to the war in Gaza and ongoing violations in the West Bank.

In an exclusive interview with Euronews, EU foreign policy chief Kaja Kallas confirmed plans to suspend trade-related provisions of the Israel-EU Association Agreement.

Trade between the EU and Israel totalled €42.6 billion in 2024, with preferential treatment applying to roughly 37% of that figure, Kallas confirmed.

The proposal also includes sanctions against two hard-line members of Prime Minister Benjamin Netanyahu’s government: National Security Minister Itamar Ben Gvir and Finance Minister Bezalel Smotrich, both of whom are already subject to sanctions and travel bans in several Western countries.

Announcing the measures, Kallas emphasised that the EU had deliberately chosen a targeted approach designed to pressure Netanyahu’s government while minimising the impact on ordinary Israelis.

“I want to be very clear. The aim is not to punish Israel. The aim is to improve the humanitarian situation in Gaza,” she told reporters at a news conference in Brussels on September 17. “That’s why the proposals we are making are not really touching or affecting the people but putting pressure on the Israeli government to change course.”

European Commission President Ursula von der Leyen first revealed the plan to target Israeli trade with the bloc during last week’s State of the EU speech.

The Commission is expected to formally approve the proposals on September 17. However, neither the trade measures nor the sanctions currently enjoy enough backing, with Germany, Austria, Italy, and Hungary continuing to resist. For the plan to succeed, it must secure qualified majority support — meaning at least one major member state, such as Germany or Italy, would need to shift its position.

Kallas urged those blocking the initiative to suggest alternatives if they acknowledge the severity of the crisis.

"We had very intensive discussions in the Foreign Affairs Council about this," Kallas said. "My question to all counterparts, because it's not only Germany, was that if you agree on the diagnosis that the situation is extremely grave, the situation is disastrous, and untenable, then the question is, what do we do about this?"

By Tamilla Hasanova