Threats of arms embargos and their effect on the IDF’s operational capabilities

By Yehoshua Kelisky, INSS    10 April 2024

American aid to Israel in the form of generous military grants allows the State of Israel to equip itself with the best of the American weapons arsenal according to the needs of the IDF. The advantage for the Americans is both political and economic:

Politically, it causes the State of Israel to become dependent militarily and politically on the United States while it enables the United States to limit the freedom of action of the IDF and the State of Israel.

Economically, it subsidizes the American arms industry.

The disadvantages from Israel’s perspective are the temporary or permanent conditions on the supply of weapons, ammunition, or critical components for weapons, which are used as leverage to limit Israel’s military and political activities. For example, the Reagan administration suspended the supply of F-16 aircrafts to Israel after the bombing of the reactor in Iraq in 1981, out of anger at IDF actions. Another disadvantage from the Israeli side is the difficulty of using aid funds in a controlled manner (mainly for reasons of convenience) to purchase weapons and ammunition from American suppliers instead of procuring from the Israeli defense industry.

What does the threat of an arms embargo on Israel mean? This threat is a double-edged sword since a significant part of the IDF’s armaments, such as the Tamir missiles for the Iron Dome system, the Arrow system, artillery shells and missiles, advanced models of UAVs and precision armaments—laser or GPS-guided—for IDF fighter jets, radar systems, warning and anti-aircraft systems, electronic and cyber products, are all original Israeli developments, which are partly produced in the United States or in Europe by Israeli subsidiaries, or as a result of a commitment to divert some of the American aid to the local US industry. Regarding Europe, the arms embargos are threats, although some have been realized through the ban on exports to Israel—in violation of signed contracts—of certain spare parts for the F-35I aircraft (Netherlands) or the “Lavi” training aircraft (Italy), or various items of ammunition (UK and Canada). These represent a negligible percentage of countries, and they are embargos with marginal effects, considering that the balance of defense trade with Canada, for example, significantly favors Israel.

The profit for these various countries from Israel’s defense industry is enormous both economically and operationally. In the years 2021–2022, 29%–41% of the defense exports were redirected to Europe and 11% were redirected to North America. The US army’s storage of 155 mm shells in Israel has also proven effective in the war in Ukraine. Israel is also a significant arms exporter to many countries, including those that threaten an embargo.

Israel is one of the ten leading countries in arms exports with an annual volume of $12.5 billion for 2022, with only about 20–25% of the production directed toward its domestic needs.