The €230 Million Question: Can EU Tariffs Truly Sway Israeli Policy?

The European Union’s new strategy against Israel boils down to a €230 million question: is this amount in new tariffs, alongside other economic pressures, enough to genuinely sway the security policy of a nation at war? While the figure is substantial, its ability to force a change of course is the subject of intense debate.
The proposed tariffs would be levied on 37% of the €15.9 billion in goods Israel exports to the EU, its largest trading partner. The mechanism involves revoking tariff-free status and applying standard WTO rates. The EU’s calculation is that this economic pain, directly hitting Israeli businesses, will create domestic pressure for a policy shift regarding Gaza.
The theory behind this economic coercion is that it alters the cost-benefit analysis for the Israeli government. Proponents believe that as the economic costs of the war mount—compounded by these new tariffs—the government will be forced to seek a more diplomatic and less costly resolution to the conflict.
However, Israel has a long history of prioritizing national security over economic considerations and has explicitly stated that “pressure through sanctions will not work.” The government in Jerusalem is betting that its national resolve, combined with the strategic importance of its military goals, will outweigh the financial impact of the EU’s measures.
Ultimately, the effectiveness of the €230 million lever is uncertain. For the EU, it represents the most significant non-military tool at its disposal. But for a country that perceives itself as fighting an existential battle, it may be viewed as a manageable price to pay, raising serious questions about the limits of economic statecraft in intractable conflicts.