The deep and long-standing ties between German arms manufacturers and the Israeli military will continue despite Berlin’s decision to partially block arms sales to Tel Aviv.

Several high-value exports, including submarines and naval corvettes, are reportedly exempt from the ban, which only covers weapons likely to be used in Gaza.

Germany’s imports from Israel, including a major deal for the purchase of Arrow-3 missile defense systems, will also be unaffected.

“This is unlikely to affect the defense industry relations between Israel and Germany in the long term,” said Zain Hussain, an arms export expert at the Stockholm International Peace Research Institute (SIPRI), which monitors the global arms trade.

Germany is Israel’s second-largest supplier of “major weapons” after the US, and Hussain said, “Israel will continue to rely on these countries for most of its significant weapons capabilities.”

Merz’s restrictions ‘deliberately limited’

An unanswered question is whether shipments of German-made engines, transmissions, and spare parts for Israeli armored vehicles, which are widely used in Gaza and the West Bank, will continue.

A German government spokesperson declined to answer questions about tank parts on Monday, stating that each case would be evaluated individually.

Engine manufacturer MTU, reportedly among the suppliers, announced that it would comply with export control rules in the countries where it operates but would not comment on possible exports to Israel.

Muriel Asseburg, an Israel expert at the German Institute for International and Security Affairs (SWP), said that Merz’s restrictions were deliberately limited in scope and duration and therefore unlikely to have a long-term impact on defense relations, but added, “A partial embargo by Israel’s second-largest arms supplier still sends a message.”

German arms companies say they have not yet received information from the government

German defense industry players also remain in the dark on the matter. Hans Christoph Atzpodien, head of the German defense industry lobby group BDSV, told Euractiv on Monday that they “have no information beyond what is publicly available.”

Thyssenkrupp Marine Systems, which produces naval vessels for Israel, also said they “have not received any official information from the federal government.”

According to SIPRI, Israel’s Sa’ar 6 naval corvettes, built in part by Thyssenkrupp Marine Systems, are being used to strike targets in Gaza.

In an internal document addressing criticism from within his own CDU party, Merz said the ban would not apply to “air and sea defense equipment vital for Israel’s self-defense.”

Approval for 251 million euros in arms exports to Israel since the beginning of 2024

Details about Germany’s arms exports are largely confidential, and export licenses are secretly approved by Germany’s cabinet-level national security council. Apart from semi-annual figures on the total export value of defense products, very little information is officially disclosed.

Following the October 7 Al-Aqsa Flood operation, Germany granted arms export licenses to Israel worth approximately 326 million euros in 2023 after an expedited approval process. This figure is nearly ten times that of the previous year. In 2024, another 161 million euros were approved.

According to Ministry of Economy data, Germany exported approximately 90 million euros worth of weapons to Israel in the first half of 2025.

According to information obtained by Die Linke (The Left Party) through a parliamentary inquiry, the shipments included firearms, ammunition, weapon parts, special army and navy equipment, electronic devices, and special armored vehicles.

Asseburg said that it is not entirely clear from publicly available information which German-made weapons are being used directly in Gaza, but that even equipment used elsewhere enables Israel to use other weapons in its military operations.

She said that Germany’s deliveries of “corvettes, anti-tank weapons, mechanical parts for armored vehicles, armored vehicle ammunition, small arms, and small arms ammunition” are “important for Israel’s war in the Gaza Strip.”

Asseburg also added that Israel’s “extreme dependence on US arms deliveries and financing” means that the decisions of US President Donald Trump are “decisive” in influencing Israel’s behavior.

Renk threatens to move production out of Germany

German defense industry company Renk has threatened to move part of its production abroad to continue selling parts for Israeli tanks following Berlin’s announcement of an export embargo.

The head of the Bavaria-based group, which produces transmissions for Israeli tanks and armored vehicles, said it is their “responsibility” to ensure the country “maintains its deterrence capability.”

CEO Alexander Sagel told the Financial Times (FT) that Renk is still trying to understand the consequences of Chancellor Friedrich Merz’s announcement last week that he would suspend the sale of military products that could be used in Gaza.

Sagel stated that as a German company, Renk will comply with the country’s laws and regulations.

However, he added that the company, which has a market value of 6.3 billion euros, is considering other ways to fulfill its contracts if the ban is approved by Germany’s security council.

Sagel had previously told analysts that 2% to 3% of Renk’s sales are to Israel. “It is also clear that we are discussing a Plan B. Plan B is to move the production of these specific transmissions to the US,” Sagel said.

CEO Sagel: It is our responsibility to maintain Israel’s deterrence

When asked about the moral aspect of supplying tank parts to Israel, which is accused of widespread human rights violations, Sagel claimed it is a “difficult discussion.”

Sagel added, “Of course, we are following all the discussions regarding the Gaza Strip. But from Germany’s perspective, it is our responsibility to ensure that Israel maintains its deterrent power. This power is necessary not only in Gaza but also on other borders.”

Sagel declined to disclose the number of transmissions Renk is supposed to deliver to Israel but told analysts that the company is contracted to supply “hundreds” of products.

On Wednesday, Renk reported that its revenues for the first half of 2025 rose by 22% to 620 million euros compared to the same period last year, benefiting from an increase in defense spending in Europe. Adjusted profit before interest and taxes rose by 29% to 89 million euros.

Sagel said that if the embargo continues, it will affect Renk’s operating profit in the second half of the year by several million euros.

Armin Papperger, CEO of Rheinmetall, one of the continent’s largest defense companies, told the FT that his company, which produces a variety of products including tank ammunition, does not export any weapons to Israel.