UK Considered Suspending Trade Agreement with Israel Over Gaza and West Bank Actions

In August 2025, the UK government contemplated suspending its trade partnership agreement with Israel due to Israeli military actions in Gaza and the West Bank, according to a Sky News report. This trade agreement grants Israeli imports preferential tax treatment and allows most goods to enter the UK duty-free. The issue was shelved following the ceasefire agreement between Israel and Hamas in October 2025.

The information emerged from a UK Freedom of Information request revealing that the British Department for Business and Trade conducted an impact assessment on suspending the trade deal. Earlier in May 2025, the UK had already paused free trade negotiations with Israel and imposed sanctions on several organizations and settlers after then-Foreign Secretary David Lammy condemned Israeli Defense Minister Israel Katz's remarks about "cleansing" Gaza as "repugnant and monstrous." Despite this, the existing trade agreement remained in effect, though the UK Embassy stated that progress on a new trade deal was impossible under Prime Minister Netanyahu's government due to its policies in the West Bank and Gaza.

The August assessment was prompted by reports of hunger in Gaza and an advisory from the International Criminal Court in The Hague urging countries to prevent trade supporting settlement policies in the West Bank. At that time, 21 countries, including the UK, strongly condemned Israel's decision to advance construction in the E1 area near Maale Adumim. Later that month, amid ongoing criticism of the Gaza conflict, the UK government barred official Israeli participation in the DSEI arms exhibition in London. The following month, the UK was among the countries recognizing the State of Palestine.

This series of diplomatic moves reflects the UK's increasing disapproval of Israeli policies in Palestinian territories and highlights the complex interplay between trade relations and geopolitical considerations.