Trade Minister Ömer Bolat on Friday said Israel has faced significant challenges, such as an inflation increase and a swift inability to find goods after Ankara's decision to halt all trade over Tel Aviv's military campaign in Gaza.
Bolat confirmed that all imports and exports have ceased since May 2, stressing what he said was a consistency of Türkiye's policy in response to Israel's actions in Gaza.
The decision, announced earlier this month, cited the "worsening humanitarian tragedy" in the Palestinian territories and made Türkiye the first of Israel's key trade partners to halt exports and imports over its attacks in Gaza.
President Recep Tayyip Erdoğan said they could no longer "stand by and watch" Israel's violence, which has killed over 35,300 people, mostly women and children, in the Palestinian enclave.
"Everyone has seen Israel's brutal stance and attacks on innocent people in Gaza," Bolat told the Türkiye Export Mobilization summit in Istanbul.
The event was organized by Türkiye's leading media group and Daily Sabah's parent company, Turkuvaz Media.
"From the beginning, Türkiye has taken a firm stance, engaging in diplomacy and international pressure to prevent these attacks. When it became clear that Israel was committing new massacres and obstructing aid from Türkiye, we decided to cease all trade with Israel," said Bolat.
The minister stressed that trade with Palestine was ongoing. Türkiye said earlier that it would look for alternative arrangements to ensure that the trade measure does not affect Palestine.
Bolat noted what he described as severe economic repercussions for Israel following Türkiye's decision.
"Israel encountered serious issues such as inflation and shortages of goods. They were earlier able to receive goods from Türkiye within a day. Now, they have witnessed Türkiye's seriousness and resolve," said the minister.
"There is a humanitarian tragedy, massacre and brutality happening there (in Gaza). As always, we stand by our Palestinian brothers and sisters."
Data published on Wednesday showed Israel's annual inflation rate rose to 2.8% in April from 2.7% in March, above market expectations of 2.5%.
On Thursday, Israel announced that it intends to terminate its free trade deal with Türkiye and levy a 100% tariff on all imports from the country over Ankara's decision.
The plan, Israeli Finance Minister Bezalel Smotrich said, would be submitted to the Cabinet for approval.
The bilateral goods exchange between the two countries stood at nearly $7 billion a year.
The Gaza Strip is suffering a humanitarian crisis caused by Israel's unprecedented indiscriminate airstrikes and bombardments that have been raging since Oct. 7, with the United Nations and aid agencies warning of impending famine.
Malnutrition in the enclave is widespread, with international aid efforts blocked by Israel's shutdowns of its Kerem Shalom crossing and the Rafah border crossing with Egypt.
The latest conflict started after the Palestinian resistance group Hamas' attack on Israel that resulted in the deaths of 1,170 people, according to Israel.
NATO member Türkiye is among the harshest critics of Israel's military actions.
Erdoğan has branded Israel a "terrorist state," repeatedly called for an immediate cease-fire and accused it of carrying out war crimes and genocide in the Palestinian enclave.
Bolat went on to emphasize the efforts to balance the country's foreign trade amid global economic developments.
The government's medium-term economic program estimates a $106 billion foreign trade deficit this year. But Bolat said they could lower it to $80 billion or less and said they had seen signs of this in the first four months.
"Our imports have fallen by nearly 9%, and our trade deficit has decreased by 30%. In the first four months, we reduced it by $13.2 billion. We've reduced the trade deficit by $13.2 billion and the current account deficit by $26 billion over ten months, from May 2023 to March 2024," said Bolat.
"This is supporting the balancing process in the macroeconomy to progress successfully."
Bolat also discussed Türkiye's trade targets and strategies for the remainder of the year, highlighting expected growth in demand in the European Union, the country's main export market, in the second half of the year.
He cited notable increases in sales to Gulf countries.
"We have a significant export drive toward Gulf countries, and there is an increase in our exports to the U.S., the U.K., Romania, Egypt, and the Turkic Republics," the minister added.
Bolat also referred to the start of negotiations with the United Kingdom to expand the existing free trade agreement to include the services sector and investments.
He said the first negotiation team will be in London on June 10. Bolat said talks may take a long time due to the upcoming general elections in the U.K.
Bolat reaffirmed Türkiye's goals of $267 billion in goods exports and $110 billion in service exports for this year.
Outbound shipments reached $255.8 billion in 2023, up from $254 billion in 2022, marking a third straight annual peak.
