Spain maintains distinct trade relations with Israel and Palestine, shaped by profitable ties, geopolitical stations, and recent policy shifts as of 2025. Bilateral trade with Israel reached significant volumes pre-embargo, fastening on technology, defense, and goods, while Spain's engagement with Palestine emphasizes philanthropic aid and development support rather than large- scale marketable trade. In response to the Gaza conflict, Spain assessed comprehensive arms vetoes and import restrictions on Israel, including bans on agreement products, while bolstering Palestinian backing. These measures reflect Spain'spro-Palestinian positioning within the EU, balancing profitable interests with mortal rights commitments.
Historical trade overview with Israel
Spain and Israel established diplomatic relations in 1986, fostering robust trade growth. By 2023, bilateral trade exceeded €3.5 billion annually, with Spain exporting machinery, chemicals, and vehicles to Israel, while importing electronics, pharmaceuticals, and agricultural products. Defense trade was notable, including a €285 million deal with Rafael Advanced Defense Systems in 2023 and agreements for rocket launcher systems.
Israel ranked as Spain's 25th largest non-EU trading partner, with tech collaborations under frameworks like the EU-Israel Association Agreement since 2000. Trade imbalances favored Israel, with Spanish exports at €1.8 billion against €1.7 billion imports in recent years.
Spain's trade with Palestine remains modest, centered on aid rather than commerce. Annual trade volumes hover below €100 million, primarily Spanish exports of foodstuffs, medicines, and construction materials to the Palestinian Authority (PA).
Imports from Palestine are negligible, limited to artisanal goods and agricultural products. Spain's engagement prioritizes development projects in agriculture, water management, and education, funded through €50 million+ annual contributions via the EU and bilateral channels.
2025 arms embargo and military trade restrictions
In September 2025, Prime Minister Pedro Sánchez announced nine measures, including a Royal Decree-Law (10/2025) formalizing a total arms embargo on Israel from October 2023. Parliament approved this in October 2025, imposing a permanent ban on sales and purchases of weapons, ammunition, and military equipment. Key provisions deny Spanish airspace to state aircraft carrying defense materials and bar ships with military fuel from ports.
Exceptions apply to dual-use items if vital to national interests. Spain canceled multiple deals, including €285 million with Rafael (June 2025) and $207 million others, impacting Israel's defense exports minimally but signaling policy shift.
These restrictions extend to imports, prohibiting defense materials from Israel. SIPRI notes Spain's dual approach: limiting exports while restricting imports, aligning with the Arms Trade Treaty (Article 6(3)). By November 2025, the decree reinforced scrutiny on petroleum/naphtha imports for potential military use, requiring detailed origin documentation.
Bans on settlement products and economic measures
Article 3 of Royal Decree-Law 10/2025 bans imports from "illegal settlements" in Gaza and the West Bank, mandating postcode and origin details in customs declarations. The Spanish Tax Agency denies entry to such goods, targeting products like dates, wine, and construction materials. This builds on EU labeling requirements since 2015 but enforces stricter compliance. Spain also limits consular services to Spanish citizens in settlements to minimal legal aid and prohibits promotion of settlement-origin goods.
Fuel transit bans apply to ships carrying military-bound petroleum, with civilian imports permitted under review. These measures aim to combat occupation, prevent displacement, and support a two-state solution, per Sánchez's statements.
Aid and support to Palestine
Spain corroborated Palestinian ties through increased colors in the EU Border Assistance Mission( EUBAM) Rafah and new systems in husbandry, food security, and medical aid. Aid to the PA and UNRWA rose, with €20 million allocated in 2025 for Gaza relief. Spain joined 29 mates in a July 2025 statement condemning agreement expansion and supporting Palestinian tone- determination. Foreign Minister José Manuel Albares called for EU- Israel Association Agreement suspense over Gaza conduct, though EU-wide action stalled.
Diplomatic context and EU dynamics
Spain's policies diverge from EU consensus, recognizing Palestine in May 2024 alongside Ireland and Norway, prompting Israel to recall its ambassador. Sánchez pushed for EU trade deal suspension, citing human rights clauses, but faced resistance. Trade impacts remain limited to defense deals <1% of Israel's exports but symbolic weight is high. Spain banned entry for Gaza conflict perpetrators and endorsed Arab reconstruction plans indirectly via EU channels.
Intra-EU tensions arose, with Spain positioning as a moral leader. SIPRI highlights Spain's measures as among Europe's strictest, contrasting Germany's continued arms exports.
Economic impacts and trade data
Post-embargo, Spanish exports to Israel dropped 15% in Q3 2025, mainly defense-related. Imports from Israel fell 12%, affected by settlement bans. Overall trade: €3.2 billion (2024 est.), projected €2.8 billion in 2025. Palestine trade is stable at €80 million. Challenges include supply chain disruptions for Spanish firms reliant on Israeli tech. Clyde & Co advises origin verification to avoid penalties.
Challenges, legal framework, and future outlook
Implementation hurdles include customs enforcement and dual-use classifications. Legal basis: EU Common Position 2008/944/CFSP and national decree. Future: Potential EU-wide settlement bans if Spain's advocacy succeeds. Trade normalization hinges on Gaza ceasefire and two-state progress. Spain eyes diversified MENA partnerships amid Israel tensions.
Spain's evolving trade dynamics with Israel and Palestine
Spain's trade relations with Israel and Palestine in 2025 illustrate a deliberate policy pivot characterized by comprehensive arms embargoes, bans on settlement products, and enhanced aid to Palestinians, significantly reshaping military engagements while preserving avenues for civilian commerce. In September 2025, Prime Minister Pedro Sánchez announced nine targeted measures via Royal Decree-Law 10/2025, culminating in parliamentary approval of a permanent arms embargo that halted all sales, purchases, and transit of weapons, ammunition, and military equipment to and from Israel.
This built on an informal export ban from October 2023, leading to the cancellation of high-profile contracts like a €285 million deal with Rafael Advanced Defense Systems and several $207 million agreements, as confirmed by SIPRI data. Spain also prohibited use of its airspace for military aircraft carrying defense materials and barred ships transporting military-bound petroleum from its ports, with strict exceptions only for dual-use items deemed essential to national security.
These restrictions extended to imports, enforcing detailed origin documentation to block defense-related goods, aligning with Article 6(3) of the Arms Trade Treaty and EU Common Position 2008/944/CFSP.