EU proposes suspending Israel trade perks over human rights

Jorge Valero, Bloomberg News on Sep 17, 2025

By clicking submit, I authorize Arcamax and its affiliates to: (1) use, sell, and share my information for marketing purposes, including cross-context behavioral advertising, as described in our Privacy Policy , (2) add to information that I provide with other information like interests inferred from web page views, or data lawfully obtained from data brokers, such as past purchase or location data, or publicly available data, (3) contact me or enable others to contact me by email or other means with offers for different types of goods and services, and (4) retain my information while I am engaging with marketing messages that I receive and for a reasonable amount of time thereafter. I understand I can opt out at any time through an email that I receive, or by clicking here

The European Union proposed suspending Israel’s preferential trade benefits as part of a new package of sanctions in response to the deteriorating humanitarian situation in Gaza.

The European Commission, the E.U. executive’s arm, proposed on Wednesday to suspend part of its association agreement with Israel, which means the country will be charged the same tariff rate as other nations that don’t have a trade accord with the bloc, according to a commission statement.

Israeli exporters will pay additional tariffs of around €227 million ($269 million) annually, according to a senior European Commission official, who spoke under the condition of anonymity. The E.U. is Israel’s largest trading partner.

The move comes amid a global outcry at the war’s toll on Palestinian civilians, especially after Israel launched its ground offensive against Gaza City in recent days, forcing the displacement of thousands of families.

Israel described the package as “morally and politically distorted,” and threatened a response, its Foreign Affairs Minister Gideon Sa’ar wrote on X. “Steps against Israel will be answered accordingly, and we hope we will not be required to take them,” he said.

While the US, Israel’s main ally, has backed the operation, most European and Arab governments say it will lead to more suffering among Palestinians and are calling for an immediate ceasefire. Though not directly linked to the Gaza City attack, a United Nations-commissioned report this week concluded that Israel is committing a genocide in Gaza, which it firmly denies.

Suspension of the trade benefits will require a qualified majority among the 27 member states. Countries including Germany have opposed punishing Israel.

“I am aware it will be difficult to find majorities,” Ursula von der Leyen told lawmakers last week. “But we must all take our own responsibilities.”

The commission also proposed sanctions on two extremist Israeli ministers, the suspension of around €20 million of financial support for technical cooperation with Israel and sanctions on 10 members of Hamas.

Investors are becoming warier of the impact of the war on Israel’s economy and long-term outlook. Israeli stocks are down for a sixth-straight day, and are among the world’s worst performers in dollar terms this month. The selloff deepened this week after Prime Minister Benjamin Netanyahu acknowledged Israel’s growing international isolation and spoke of the need for self reliance to withstand any sanctions.