The UK government has banned British firms from trading with Israeli settlements in the occupied West Bank, prompting warnings that companies complying with the ban could face boycotts and legal penalties in the United States. Foreign Secretary Ed Miliband announced the measure, accusing settlers of "ethnic cleansing" of Palestinians and marking a significant hardening of Britain's stance towards Israel, a longstanding ally. American activists and politicians have responded angrily, with several US states threatening to invoke their own anti-boycott laws against British businesses that fall in line with the UK policy.

The ban prohibits imports of goods from settlements and bars British firms from providing services such as financing, construction and real estate to them. In the US, activists have launched a whistleblower hotline urging staff to report compliant British companies, while officials including Arkansas Governor Sarah Huckabee Sanders and Florida congressman Randy Fine warned that state laws could bar such firms from public contracts or business dealings, citing precedent from a 2019 case involving Airbnb. Analysts note the direct economic impact will likely be small, as settlement exports are limited and mostly agricultural, but the move is seen as a symbolic rebuke reflecting Israel's growing diplomatic isolation over the Gaza war; Israeli Foreign Minister Gideon Sa'ar condemned the ban as "despicable".