Israeli-Turkish trade, a long-standing economic relationship, is facing a major challenge as Turkey has halted all bilateral trade with Israel until the war in Gaza ends. This move has left Israeli importers scrambling to find alternative sources for key items like cement, food, and cars. While economists believe this may lead to near-term shortages, they do not anticipate a significant impact on Israel’s economy, which is valued at $500 billion.
Despite the setback, Israeli officials are confident in their ability to find reliable sources for the long term. They are exploring deals with countries like Greece and Italy to fill the void left by Turkey. However, the main challenge lies in finding alternative destinations for over $1.5 billion worth of displaced Israeli exports, such as fuel, chemicals, and semiconductors.
The trade ban has also affected industries like construction and auto imports in Israel. With Turkish cement imports accounting for 40% of Israel’s total, the construction industry is now turning to European suppliers, albeit at a higher cost. Similarly, auto importers are facing delays in receiving models from Turkey, impacting the delivery of popular cars like Toyota and Hyundai.
Despite these challenges, Israeli officials are optimistic about increasing local production to avert shortages. They believe that reducing dependence on hostile countries and strengthening productive independence is crucial for the country’s economic resilience. As the situation unfolds, Israel is determined to navigate through this diplomatic storm and emerge stronger in the long run.