According to Dr Ron Tomer, president of the Israeli Manufacturers Association, the main short-term impact of the Turkish sanctions on the Israeli economy is likely to be felt in the construction industry.
Turkey’s Trade Ministry announced last week that it would restrict exports of a wide range of products to Israel until a ceasefire is declared in Gaza.
The ministry said the measure would apply to exports of 54 different categories of products, including iron, marble, steel, cement, aluminium, bricks, fertiliser, construction machinery and products and aviation fuel.
Turkish trade sanctions could affect Israel’s economy
“Turkey has taken over larger and larger portions of many of Israel’s industries, including construction,” Tomer said.
“Israel has the capacity to produce almost all products that are exported from Turkey, but we don’t have the production lines to do it,” he said. He blames Israel’s reliance on low-cost Turkish products for flooding into the Israeli market and causing local factories to close. Israel currently has two steel factories and one cement plant left, according to the association. Construction site (Photo by Gili Yaari Flash 90)
The sanctions will also affect Israel’s construction industry, but “we are lucky” because the war has slowed it down significantly, Tomer said sarcastically. “The reason construction has been slowing down recently is because there are no Palestinian workers,” he explained.
For this reason, Tomer believes that Israeli industry will be able to make up for the shortfall caused by Turkish imports until the construction sector recovers.
Tomer is more interested in what happens after the war. He says Turkey is using bad practices like low wages for workers and lack of environmental protection measures to drive down prices and penetrate more and more of the Israeli market. “This is how they destroy Israel’s local industry and undermine the independence of our production,” he said.
Tomer called for measures to counter this loss of independence and promote local production, such as government restrictions on purchases from Turkey.
Minister of Economy and Industry Nir Barkat also responded to the sanctions, saying his ministry was “working to provide support and find alternative solutions.” [Turkish imports] By increasing local production and increasing imports from alternative countries.”
According to MIT’s Observatory of Economic Complexity, Turkey’s largest export to Israel is steel, accounting for 18.5% of exports to Israel, amounting to about $1.29 billion, as of 2022. Cement is also a major export product, accounting for about 3% of Turkish exports to Israel, amounting to about $234 million, as of 2022, according to the OEC.
Other major products imported into Israel from Turkey are cars, which account for around 5 percent of imports from the country, and jewellery, which accounts for around 3.7 percent of imports.
Reuters contributed to this report.
