Smotrich cancels free trade deal, imposes 100% import tariffs on Turkish goods as rift grows

Finance Minister Bezalel Smotrich has announced that he will submit a plan to the cabinet abolishing Israel’s free trade agreement (FTA) with Turkey and impose a 100% tariff on imports from there in retaliation for Turkish President Tayyip Erdogan’s decision to halt exports to Israel.

The FTA, which was signed in 1996, was expanded in 2000 to abolish all duties and charges on industrial imports.By 2007, the FTA had been expanded further to cover agricultural products - including eggs, live plants, vegetables, dried tomatoes, coffee concentrates, various juices, beer, several types of nuts, and dried figs and apricots.

The abolition of this agreement would mean that previous tariff rates will be reimposed, and 100% will be added on.Smotrich clarified that these tariffs would remain in place as long as Erdogan remains in power.

Increase import diversity

Additionally, the Economy, Foreign Affairs, and Finance ministers are expected to take the necessary steps to diversify Israeli imports away from Turkish products and create alternate import sources to reduce Israeli reliance on the Turkish economy.

This may cause short-term disruptions but should, in the long term, reduce costs and help mitigate future supply issues due to geopolitical events.

The move is also expected to help improve Israeli industrial resilience and competitiveness in the global markets.The Manufacturers Association of Israel, which claims to represent 1,800 members responsible for over 90% of Israeli industrial output, is pushing manufacturers to pursue alternative import arrangements with China, Eastern Europe, Greece, Germany, Cyprus, and Taiwan.

“Raising the import tariff on Turkey is a suitable Zionist answer to Erdogan,” Smotrich said. “His announcement of the stoppage of imports to Israel constitutes a declaration of an economic boycott and a serious violation of international trade agreements to which Turkey has committed.”

He added that “for too many years, the State of Israel struggled with Erdogan’s antisemitism. Not on my shift. If, at the end of Erdogan’s term, the citizens of Turkey elect a leader who is sane and not a hater of Israel, it would be possible to return to the trade agreement with Turkey.”