After long months of fighting in Gaza, boycotts against Israel begin to materialize

The threats of boycotts against the State of Israel and Israeli companies over the conflict in Gaza have become a reality in recent weeks. Several countries and corporations have severed ties with their Israeli counterparts, leading to significant impacts across the Israeli economy.

The boycotts against Israel are now manifesting in various sectors, highlighting the broader economic consequences of the ongoing geopolitical tensions.

Turkey, one of Israel's major trading partners, announced last month that it was ending all commercial ties with Israel, including exports of construction materials, machinery, cars, rubber, plastic, health and agricultural products, minerals, and energy products. Israel has been importing goods from Turkey at a volume of approximately $5 billion per year.

Colombia, Israel’s main coal supplier, broke all ties with Israel last month, including a cessation of its coal exports, forcing Israel to seek alternative suppliers, including South Africa and Russia, Kazakhstan and Australia. 

While China has not officially stated a boycott or sanctions against Israel, Chinese companies have notably begun making it difficult for Israeli companies to obtain the necessary goods.

“The Chinese are imposing a kind of sanction on us. They don't officially declare it, but they are delaying shipments to Israel,” one unnamed senior figure in a factory told Ynet News as far back as December.

“They have various excuses and pretexts, such as requiring suppliers from China to obtain export licenses to Israel that did not exist before. Additionally, they demand that we fill out numerous forms, causing significant delays. This has never happened to us before. We are talking about many different types of components. In electronic products, there are tens of thousands of components, but if even one component doesn't arrive, we cannot deliver the product,” he added.

Israel's weapons industry is also facing severe boycotts, including a recent ban by French authorities from participating in the international arms exhibition “Eurosatory.” The tradeshow event, which opens next week in France, is a venue where Israel typically secures weapons contracts worth hundreds of millions of dollars.

“Conditions are no longer right to host Israeli companies at the Paris show, given that the French president is calling for the cessation of IDF operation in Rafah,” the French Defense Ministry said in a statement last month.

Furthermore, several companies have signaled their unwillingness to continue their current investments in Israel, with companies in Morocco and Bahrain reconsidering planned partnerships with Israeli firms.

Abu Dhabi National Oil, the state-owned oil company of the United Arab Emirates, will reportedly cancel its plan to purchase a 50% stake in Israel's NewMed Energy, in partnership with British Petroleum.

In addition, several investment companies have announced they would not participate in tenders for establishing railway lines in Israel.

According to Securities Authority Chairman Sefi Zinger, foreign investors have withdrawn $9 billion from the Israeli stock market, including $3.7 billion from government bonds. This withdrawal, however, reportedly does not reflect boycotts or sanctions but economic predictions about the risks of investing in a nation at war.

While universities across the West have been pressured to divest from Israel by protesting students and activists, the CEO of the Israel-America Chamber of Commerce Oded Rose is optimistic about how American universities will respond.

“We believe U.S. universities will not change their investment policies in Israel or withdraw funds at this stage, partly because they are supported by many Jewish and non-Jewish donors alike, who oppose the violence of the protesters against Israel on campuses,” he said.

According to Ynet, “So far, only threats to cease support have been heard, except for a few announcements from European universities, mainly in Scandinavia. The damage has been minimal.”