Turkey recently suspended trade with Israel because of the “worsening humanitarian tragedy” in Gaza.
Ankara says it will resume trade if Israel permits an “uninterrupted and sufficient flow” of aid into the enclave. Predictably, Israel’s chief diplomat, Israel Katz, accused Turkish President Recep Tayyip Erdogan of behaving like a “dictator” while “disregarding the interests of the Turkish people and businessmen and ignoring international trade agreements.” Hamas unsurprisingly praised Turkey.
Tensions between Turkey and Israel have soared at various points in recent decades, such as the 2009 Davos Summit and the 2010 Gaza flotilla raid. Yet, until now, Turkish-Israeli economic relations always weathered those storms. Therefore, Turkey halting trade with Israel this month is a big deal.
“Since mid-October last year, when President Erdogan stepped up his sharp criticism of Israel’s attack on civilians in Gaza, trade has been the one element of the two countries’ relationship that has remained positive. Now that Turkey has cut off all trade with Israel, that positive element is gone,” Matthew Bryza, the former U.S. Deputy Assistant Secretary of State for Europe and Eurasia, told RS.
“Erdogan appears to be breaking with tradition in taking a holistic approach to ties with Israel. In previous crises, trade relations always remained distinct from strained political ties. Now, the government appears not to be concerned with escalation on all fronts,” said Batu Coşkun, a political analyst who specializes in Turkish affairs at the Sadeq Institute, in an interview with RS.
According to Murat Aslan, a faculty member at Hasan Kalyoncu University and a researcher at the SETA Foundation, Turkey has cards it can play if it seeks to increase pressure on Israel beyond suspending trade. These include encouraging other countries to join Turkey in imposing embargos on Israel and closing Turkish airspace to Israeli flights. “We have to wait and see [if Turkey takes] these steps, but I know that there are [many] options,” said Aslan.
Domestic pressures and mounting tension
Turkey’s domestic politics must be considered. At an earlier stage in the Gaza war, segments of Turkish society started pressuring Erdogan’s government to take concrete steps against Tel Aviv beyond strong rhetoric. A few weeks ago, Turkey curbed trade with Israel in 54 areas, including steel, fertilizer, and jet fuel.
In the lead up to last month’s municipal elections, there were calls for severing all trade with Israel, which resonated with many of Erdogan’s constituents. As a result, a fair share of Erdogan’s traditional supporters either refused to vote, or they supported the New Welfare Party, an Islamist party that campaigned on opposing the government’s policy of permitting continued trade with Israel amid the Gaza war.
Now, in deciding to halt Turkish trade with Israel, “Erdogan appears to be reacting to retain his popularity,” according to Coşkun. “This means that the president is likely to continue escalating rhetoric, which means more tension in ties with Israel.”
The economic impact
Israel has long maintained robust trade, investment, and commercial relations with Turkey. In 2023, bilateral trade stood at roughly $7 billion. Zorlu Holding, a Turkish conglomerate, is a major investor in Israel’s economy, and Turkish construction companies have made lots of money in Israel over the years. It can be taken for granted that construction costs will increase in Israel, and there will be inflationary effects due to Ankara’s decision to halt trade.
But, for the time being, it is less than clear how much harm the Turkish embargo will inflict on Israel’s economy, and how long the harm will last. Countries can adapt when their trade relations are interrupted or sanctions are imposed. Russia adjusting its trade routes and supply chains after the West waged financial warfare against Moscow in response to Russia’s full-scale invasion of Ukraine in 2022 is an example. Similarly, Israeli policymakers are now busy trying to assess what damage will likely be inflicted on their economy and how to adjust to offset the effects of Turkey’s embargo.
Additionally, Turkey’s economy will take a hit too. This was a major reason why Ankara did not implement the embargo sooner. There is widespread support across Turkey’s political spectrum for the Palestinians, but also a debate over how much of a price the nation should pay to support Gaza.
“It will definitely harm the Israeli economy in unprecedented ways given the internal situation in Israel and the Houthis’ measures at the entrance of the Red Sea,” said Ali Bakir, an assistant professor at Qatar University’s Ibn Khaldon Center and nonresident senior fellow at the Atlantic Council's Scowcroft Middle East Security Initiative, in an interview with RS.
“Having said this, it will also harm the Turkish economy, which is already struggling and is being adjusted to recover,” Bakir added, noting that regional governments that are afraid of taking such financial risks should step up to help those, like Turkey, that are willing to do so.
Azerbaijani oil
The impact of Turkey’s actions on Azerbaijan and, more specifically, its oil exports to Israel will matter. Azerbaijani oil goes through the Baku-Tbilisi-Ceyhan pipeline and then on to Israel via tanker. If Ankara would stop allowing Azerbaijan to export oil to Israel through the Ceyhan port, Israel’s economy could greatly suffer.
“It’s not clear at this point whether or not Turkey will cut off those flows of [Azerbaijani] oil…to Israel. Were that to be the case, that could have a more significant impact on Israel’s economy as the economy adjusts to having to find new supplies,” said Bryza, who also served as U.S. ambassador to Azerbaijan.
He noted that Israel has long-term energy contracts with Azerbaijan, and it would have to pay much more for oil if bought on the spot market.
“If Turkey halts this flow…then Israel has to find another source for energy. Otherwise, they will be in trouble,” added Aslan.
Nonetheless, given the nature of the Ankara-Baku alliance, Turkey may refrain from taking this action. “I would be surprised if Turkey were to cut off flows of Azerbaijani oil through and from the Turkish port of Ceyhan to Israel because that would also damage the interests of Azerbaijan,” said Bryza. “Turkey and Azerbaijan have the closest of bilateral relationships with the cliche describing that relationship, they are ‘one nation and two states.’”
Will others follow Turkey in halting trade with Israel?
Turkey’s suspension of bilateral trade will inevitably harm the Israeli economy, at least in the near-term. This will be an additional cost that Prime Minister Benjamin Netanyahu’s government, and Israel as a country will have to pay for its crimes against the civilians of Gaza.
However, if Turkey is alone in imposing an embargo on Israel, the economic harm inflicted on Israel could be limited. What needs to be considered is the possibility of other countries following Ankara’s lead, which could make Israel’s economic challenges more serious.
Turkey’s decision will certainly be welcome by Arab citizens across the Middle East and North Africa. They will likely point to Ankara’s embargo on Israel as an example of how Muslim countries should deal with Israel and call on their governments to follow suit. Whether those governments will do so, however, is another question.
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![Following a largely preordained election, Vladimir Putin was sworn in last week for another six-year term as president of Russia. Putin’s victory has, of course, been met with accusations of fraud and political interference, factors that help explain his 87.3% vote share. If this continuation of Putin’s 24-year-long hold on power makes one thing clear, it’s that he and his regime will not be going anywhere for the foreseeable future. But, as his war in Ukraine continues with no clear end in sight, what is less clear is how Washington plans to deal with this reality. Experts say Washington needs to start projecting a long-term strategy toward Russia and its war in Ukraine, wielding its political leverage to apply pressure on Putin and push for more diplomacy aimed at ending the conflict. Only by looking beyond short-term solutions can Washington realistically move the needle in Ukraine. Since Russia’s full-scale invasion, the U.S. has focused on getting aid to Ukraine to help it win back all of its pre-2014 territory, a goal complicated by Kyiv’s systemic shortages of munitions and manpower. But that response neglects a more strategic approach to the war, according to Andrew Weiss of the Carnegie Endowment for International Peace, who spoke in a recent panel hosted by Carnegie. “There is a vortex of emergency planning that people have been, unfortunately, sucked into for the better part of two years since the intelligence first arrived in the fall of 2021,” Weiss said. “And so the urgent crowds out the strategic.” Historian Stephen Kotkin, for his part, says preserving Ukraine’s sovereignty is critical. However, the apparent focus on regaining territory, pushed by the U.S., is misguided. “Wars are never about regaining territory. It's about the capacity to fight and the will to fight. And if Russia has the capacity to fight and Ukraine takes back territory, Russia won't stop fighting,” Kotkin said in a podcast on the Wall Street Journal. And it appears Russia does have the capacity. The number of troops and weapons at Russia’s disposal far exceeds Ukraine’s, and Russian leaders spend twice as much on defense as their Ukrainian counterparts. Ukraine will need a continuous supply of aid from the West to continue to match up to Russia. And while aid to Ukraine is important, Kotkin says, so is a clear plan for determining the preferred outcome of the war. The U.S. may be better served by using the significant political leverage it has over Russia to shape a long-term outcome in its favor. George Beebe of the Quincy Institute, which publishes Responsible Statecraft, says that Russia’s primary concerns and interests do not end with Ukraine. Moscow is fundamentally concerned about the NATO alliance and the threat it may pose to Russian internal stability. Negotiations and dialogue about the bounds and limits of NATO and Russia’s powers, therefore, are critical to the broader conflict. This is a process that is not possible without the U.S. and Europe. “That means by definition, we have some leverage,” Beebe says. To this point, Kotkin says the strength of the U.S. and its allies lies in their political influence — where they are much more powerful than Russia — rather than on the battlefield. Leveraging this influence will be a necessary tool in reaching an agreement that is favorable to the West’s interests, “one that protects the United States, protects its allies in Europe, that preserves an independent Ukraine, but also respects Russia's core security interests there.” In Kotkin’s view, this would mean pushing for an armistice that ends the fighting on the ground and preserves Ukrainian sovereignty, meaning not legally acknowledging Russia’s possession of the territory they have taken during the war. Then, negotiations can proceed. Beebe adds that a treaty on how conventional forces can be used in Europe will be important, one that establishes limits on where and how militaries can be deployed. “[Russia] need[s] some understanding with the West about what we're all going to agree to rule out in terms of interference in the other's domestic affairs,” Beebe said. Critical to these objectives is dialogue with Putin, which Beebe says Washington has not done enough to facilitate. U.S. officials have stated publicly that they do not plan to meet with Putin. The U.S. rejected Putin’s most statements of his willingness to negotiate, which he expressed in an interview with Tucker Carlson in February, citing skepticism that Putin has any genuine intentions of ending the war. “Despite Mr. Putin’s words, we have seen no actions to indicate he is interested in ending this war. If he was, he would pull back his forces and stop his ceaseless attacks on Ukraine,” a spokesperson for the White House’s National Security Council said in response. But neither side has been open to serious communication. Biden and Putin haven’t met to engage in meaningful talks about the war since it began, their last meeting taking place before the war began in the summer of 2021 in Geneva. Weiss says the U.S. should make it clear that those lines of communication are open. “Any strategy that involves diplomatic outreach also has to be sort of undergirded by serious resolve and a sense that we're not we're not going anywhere,” Weiss said. An end to the war will be critical to long-term global stability. Russia will remain a significant player on the world stage, Beebe explains, considering it is the world’s largest nuclear power and a leading energy producer. It is therefore ultimately in the U.S. and Europe’s interests to reach a relationship “that combines competitive and cooperative elements, and where we find a way to manage our differences and make sure that they don't spiral into very dangerous military confrontation,” he says. As two major global superpowers, the U.S. and Russia need to find a way to share the world. Only genuine, long-term planning can ensure that Washington will be able to shape that future in its best interests.](https://responsiblestatecraft.org/media-library/following-a-largely-preordained-election-vladimir-putin-was-sworn-in-last-week-for-another-six-year-term-as-president-of-russia.jpg?id=34283894&width=600&height=600&quality=90&coordinates=483%2C0%2C483%2C0)
