Britain Sets Settlement Sanctions in Motion; France and Canada Join, Israel Retaliates

【Financial News New York = Reporter Lee Byung-chul】  Starting with the United Kingdom, Western countries including France and Canada have moved to impose trade restrictions targeting Israeli settlements in the West Bank. After Israel immediately retaliated by closing the British consulate, the possibility of a U.S. response to the United Kingdom has also been raised, escalating the settlement issue into a diplomatic and trade dispute among Western allies.
According to The Wall Street Journal and other outlets on the 8th (local time), 12 countries, including the United Kingdom, France and Canada, said they would introduce new trade restrictions in response to Israel’s expansion of settlements in the West Bank.
After the United Kingdom became the first to announce a halt to trade with the settlements, Israel immediately retaliated. It said it would close the British consulate in East Jerusalem, which handles Palestinian affairs, and exclude British representatives from the U.S.-led postwar coordination center for Gaza.
British Foreign Secretary Edward Samuel Miliband described the expansion of settlements as “ethnic cleansing” and criticized Israel for undermining the “two-state solution,” under which Israel and Palestine coexist as independent states. The sanctions cover not only direct trade with the settlements but also British companies providing services there. Israel denounced the move as “an outrageous lie,” accusing the United Kingdom of interfering in matters of sovereignty.
The dispute also appears likely to spread to the United States. Mike Huckabee, the U.S. ambassador to Israel, warned the BBC before the United Kingdom’s announcement that the United States could retaliate if Britain proceeded with the sanctions. Measures to restrict British companies’ operations in some U.S. states were even discussed.
However, U.S. Secretary of State Marco Rubio drew a distinction, saying that President Donald Trump had not yet taken a direct position on the issue. He said Britain had notified the Trump administration of its plans before making the announcement and added, “We do not want violence, conflict or tensions to escalate in the West Bank.”
France and Canada joined immediately after the United Kingdom’s announcement. Norway, Iceland, Poland and Sweden also agreed to pursue measures to block trade with the settlements and expand the ban across the European Union. Ireland had already imposed a ban on trade with the settlements this summer, followed by Spain and Belgium. Germany, however, has opposed EU economic sanctions against Israel and blocked an expansion at the European Union level.
The direct economic impact of the measures is limited. According to a report by the British Parliament, trade between the United Kingdom and settlements in the West Bank amounts to only about £38 million (approximately $51.4 million). However, analysts say the political message—that the settlements will not be recognized as normal trading partners—is significant.
At the center of the dispute is Israel’s expansion of the E1 settlement. Israel approved the construction of thousands of new homes in the area last year. European countries believe development of E1 could effectively divide the West Bank and make the future establishment of a Palestinian state more difficult.



[email protected] Reporter Lee Byung-chul Reporter