BRUSSELS, 17 September 2025 — The European Commission has proposed suspending elements of Israel’s preferential access to the EU market, citing the war in Gaza and the worsening humanitarian situation.
The step would lift free-trade arrangements on a defined tranche of Israeli exports, but it does not currently command enough support among EU governments to take effect.
Under the plan, Israeli goods now benefiting from tariff preferences would be treated as standard third-country imports. A senior Commission estimate suggests about €5.8 billion of exports would be affected, yielding roughly €227 million a year in duties if applied. The EU is Israel’s largest trading partner for goods, with bilateral trade totalling €42.6 billion last year.
The initiative sits within a wider package presented in Brussels by the EU’s foreign policy chief, Kaja Kallas. Alongside the trade step, she proposed targeted measures against two Israeli ministers — National Security Minister Itamar Ben-Gvir and Finance Minister Bezalel Smotrich — as well as listings covering individuals described as violent settlers and ten senior members of Hamas. Any listings would entail asset freezes and travel bans once agreed.
Different decision rules apply. Suspension of trade preferences would require a qualified majority in the Council — at least 15 of the 27 member states representing 65% of the EU population. Diplomats say support is uncertain and hinges in large part on Germany, which has not reached a final view and says it wishes to keep channels of communication with Israel open. Sanctions listings require unanimity, meaning agreement will be more difficult.
The Commission has also announced that bilateral EU support to Israel is being placed on hold, with exceptions for cooperation with Israeli civil society and with Yad Vashem, the Holocaust memorial centre. Humanitarian aid for Palestinians is channelled through separate instruments and is not affected by the pause.
Israeli officials have criticised the proposals. Foreign Minister Gideon Saar said they were “morally and politically distorted” and expressed hope that member states would reject them. Israel has argued in the past that broad economic steps would harm ordinary Israelis without changing security policy, and that responsibility for civilian suffering in Gaza lies with Hamas.
The backdrop remains the conflict triggered by the Hamas attacks of October 2023, in which about 1,200 people were killed and 251 hostages taken, according to Israeli tallies. Gaza’s health ministry says more than 64,000 Palestinians have been killed during Israel’s subsequent campaign. Those figures cannot be independently verified, but they have shaped debate across the Union as the war has continued.
If enacted, the trade measure would not end EU-Israel trade but would reinstate most-favoured-nation tariffs for the products concerned, aligning treatment with countries that have no preferential accord with the bloc. The Commission’s estimate of the duties reflects that approach. Businesses importing Israeli goods would face higher customs costs and may need to adjust contracts and pricing to reflect the change.
Attention now turns to the Council, where national governments will weigh foreign-policy aims against domestic exposure. Sectors importing Israeli chemicals, machinery, pharmaceuticals and agricultural products are expected to assess potential cost increases should tariffs return. Member states are also likely to examine legal drafting — including scope, duration and review clauses — and whether any humanitarian carve-outs or licensing provisions are warranted for specific categories.
Kallas said the proposals are intended to reflect concern at the humanitarian toll while maintaining engagement with Israeli society. She noted that while public sentiment has shifted, member-state positions have remained relatively stable, which points to a contested and incremental decision process. Whether the package advances will depend on Berlin and a small group of other capitals whose votes are decisive for qualified majority, as well as on unanimity for any sanctions listings.
If the suspension fails to secure backing, the status quo on tariffs would remain, though discussions among capitals could continue in parallel with other measures. If it passes, customs authorities would implement the changes under the EU’s common external tariff, and the Commission would be expected to review effects on trade flows after an initial period. The separate pause in bilateral support will proceed on the Commission’s authority while the Council considers the wider package.
