British companies face boycotts in US in the event that they implement Labour’s new ban on buying and selling with Israel’s West Bank

British firms operating in the US face boycotts if they implement Labour’s new ban on trading with Israeli settlements in the occupied West Bank. 

The UK government announced the trade ban on Tuesday, saying that the settlers in the territory are carrying out ‘ethnic cleansing’ of Palestinians, in a significant toughening of Britain’s stance toward a longtime ally. 

Foreign Secretary Ed Miliband said the UK will ban imports of all goods from the settlements and bar companies from providing services for the settlements, including financing, construction, infrastructure, real estate and advertising.

‘I do not believe the British people want us supporting the occupation by accepting products from settlements in our shops and supermarkets,’ Miliband said.

Activists in the US have now set up a whistleblower hotline in response, and have urged employees to report British companies which refuse to work with Israelis or Israel. 

They warned that compliant companies could face reciprocal sanctions under American anti-boycott, divestment and sanctions (BDS) laws. This could prevent US states from working with any business found to be boycotting Israel or territories under its control. 

Several US congressmen have also suggested that other British firms complying with UK sanction rules could face similar punishment.

Sarah Huckabee Sanders, the governor of Arkansas, posted on X: ‘It’s simple: boycotting the world’s only Jewish state is anti-Semitism.

‘Arkansas law makes clear that we won’t do business with any company that deliberately chooses to engage in BDS activities. Period.’

Randy Fine, the Republican representative for Florida, said: ‘As the British government considers forcing British companies to boycott portions of Israel, it should be aware that a Florida law that I passed as a member of the Legislature would ban any British company forced to comply from doing business with any state or local government in Florida.

‘It would also end any British business participating in that boycott from doing any business in Florida if it needed any official interaction with state or local government to operate (permits, tax collection).

‘Florida is one of Britain’s largest trading partners. They should understand that their vanity project in support of Muslim terror could cost them billions of dollars.

‘And for those who doubt the power of this policy, it was this same law that broke Airbnb’s misguided effort to boycott portions of Israel in 2019.’

Mark Goldfeder, director of the National Jewish Advocacy Centre in the US, said: ‘Britain has ordered its companies into a trap it never mapped.

‘Many American states, Texas and Florida among them, bar public contracts with, and force pension divestment from, any company that limits commercial relations with Israelis or Israel.

‘The words are in the statutes, and Austin and Tallahassee do not run their lists on Whitehall’s definitions.’

The economic impact is likely to be limited, since the settlements produce only a small amount of largely agricultural exports. 

But the move is a symbolic expression of displeasure with Israel by some of its closest allies, and it offers a new sign of the Israeli government’s growing isolation as a result of the Gaza war. 

Miliband said that he feels ‘a deep sense of shame about what has unfolded in Palestine under the eyes of the international community.’

‘We will not acquiesce in the destruction of the two-state solution,’ he said.

Israeli Foreign Minister Gideon Sa’ar condemned the ‘despicable’ move. He said Israel would expel UK representatives from a joint military centre monitoring the Gaza ceasefire and end UK training of the Palestinian Authority’s security forces in the West Bank. 

In addition, Israel barred entry to a dozen British lawmakers and other UK citizens whom Sa’ar said were ‘involved in antisemitic and anti-Israel activity.’ 

Under the ultranationalist government of Israeli Prime Minister Benjamin Netanyahu, settlement construction in the West Bank — seized by Israel in the 1967 Middle East war — has surged. 

Netanyahu’s government views the West Bank as the biblical and historical homeland of the Jewish people and is opposed to the creation of a Palestinian state.

The international community overwhelmingly considers such construction to be illegal. 

Britain and other countries have voiced particular concern about the E1 settlement project approved by Israel, which would effectively cut the territory in two.

There have been marked increases in attacks by settlers on Palestinians, evictions from Palestinian towns, Israeli military operations and checkpoints that choke freedom of movement, as well as several Palestinian attacks on Israelis.

‘The British government agrees that there is ethnic cleansing of Palestinians in areas of the West Bank, perpetrated by settler terrorists,’ Miliband said. 

He said there had been ‘houses bulldozed, roads and public infrastructure destroyed, families displaced from their homes.’

The ban on trade will be in place in six to nine months, Miliband said. 

He said Denmark, Finland, Iceland, Poland, Portugal and Sweden have pledged to ‘support further action.’

The Netherlands, Ireland, Belgium, Spain and Norway have either banned goods from settlements or are in the process of doing so, he said.

Miliband also tightened Britain’s embargo on weapons sales to Israel for use in Gaza to include arms ‘that materially contribute to the occupation’ of Palestinian territories.