Turkey Weaponizes Trade Against Israel Amid Gaza War
Turkey has halted all trade with Israel, a significant shift from previous diplomatic crises where economic ties remained robust. This move marks a turning point in 2024, where trade, previously a bridge between the nations, has become a tool of political conflict. Historically, despite political tensions, trade between Israel and Turkey flourished, growing from $1.2 billion in 2000 to nearly $8 billion by 2022. This was driven by a free trade agreement and mutual economic benefits, with Israel heavily reliant on Turkish imports like cement and steel, while Turkey benefited from the Israeli market.
The scale of the Gaza war and Turkey's perception of it fundamentally altered this dynamic. President Erdoğan adopted a hardline stance against Israel's actions and openly supported Hamas, viewing the conflict as an opportunity to increase Turkey's regional influence. In April 2024, Turkey initially banned exports of 54 categories of goods, followed by a complete trade stoppage in early May. This decision signaled a change in philosophy, with trade now intended to serve political objectives rather than act as a stabilizing force.
While the trade halt was a blow to Israel, particularly during wartime, the Israeli market adapted quickly. The Bank of Israel reported a significant drop in Turkish imports, but Israeli companies found alternative suppliers and pursued import substitution, mitigating the economic impact. The article suggests that while Turkey was an important supplier, it was not an indispensable one for Israel. Conversely, Turkey lost a significant export market, with Israeli exports to Turkey plummeting.
Furthermore, the halt impacted tourism, with Israeli tourist numbers to Turkey dropping by approximately 90% in 2024 compared to pre-war levels. The article posits that the 2024 crisis has eroded the confidence of Israeli businesses in the reliability of Turkish supply chains, leading to a greater emphasis on diversification and political risk assessment in future trade dealings. The shift from economic interdependence to strategic rivalry, particularly concerning influence in Syria, suggests that future economic relations will be shaped by broader geopolitical competition.
