UK, France, Canada Move to Restrict Trade With Israeli West Bank Settlements

The UK, France, and Canada announced plans on Sept. 8 to restrict trade with Israeli settlements in the occupied West Bank, marking a further tightening of their policy toward settlement activity that they say undermines prospects for a future Palestinian state.

British Foreign Secretary Ed Miliband also unveiled a broader package that includes restrictions on the purchase of settlement goods and services, expanded sanctions, and tighter export controls.

“We will take action against specific companies and individuals who provide services such as construction, infrastructure, financing or real estate for settlement expansion,” Miliband told UK lawmakers.

Miliband said the legislation needed to implement the new measures would be introduced within six to nine months. The announcement came weeks before Israel’s Oct. 27 general election.

Ahead of the statement, Israeli officials, including President Isaac Herzog and Finance Minister Bezalel Smotrich, condemned the planned measures, while U.S. Ambassador to Israel Mike Huckabee warned they could affect the UK’s trade with some U.S. states.

Officials from Canada, Denmark, Finland, France, Iceland, Ireland, Norway, Poland, Portugal, Spain, Sweden, and the UK also called on Israel to halt settlement expansion, condemned settler violence, reaffirmed Israel’s legitimate security interests, and reiterated their support for a negotiated two-state solution.

“The Government of Israel must immediately halt the expansion of settlements and civilian administrative powers, ensure accountability for settler violence, and investigate allegations against Israeli forces,” the Tuesday joint statement said.

Israel, US Push Back

Herzog condemned the planned measures, calling them “a grave miscalculation” and “a gross interference in the democratic elections of a sovereign nation.”

He said in a Tuesday post on X that sanctions would “fall on the wrong side of history,” arguing they would harm Palestinians by costing jobs and businesses, undermine the security interests of Western allies, and fail to advance peace.

“Sanctions are not a solution—dialogue is,” Herzog said, urging foreign governments to “step away from the dead-end of sanctions and boycotts” and instead pursue “constructive dialogue” and cooperation.

Huckabee told the BBC on Sept. 8 that the sanctions amounted to “discrimination against the Jewish people.”

He said the measures could limit the UK’s ability to do business in U.S. states that bar entities boycotting Israel from receiving state contracts, procurement opportunities, or public investment.

On Sept. 7, ahead of Miliband’s announcement, Smotrich called for the expulsion of the UK’s ambassador to Israel.

Israeli settlements have remained a major source of international tension since Israel captured the West Bank during the 1967 Six-Day War.

West Bank Flashpoint

The measures come less than a month after Israel opened tenders for the construction of settlement homes in the East-1 (E1) area east of Jerusalem, a project the UK has strongly opposed.

The land lies east of Jerusalem, between the city and the Israeli settlement of Ma’ale Adumim in the West Bank, which is internationally recognized as Palestinian territory.

The UK has argued that construction in the E1 area would further undermine the viability of a future Palestinian state, making the latest restrictions part of a broader effort to increase pressure over settlement activity rather than broader economic ties with Israel.

London’s position is shared by France, Germany, Italy, the Netherlands, Canada, and Norway, whose leaders said in an Aug. 20 statement that the E1 project would “drive a wedge through the West Bank.”

The UK and Israel traded 5.9 billion pounds ($7.9 billion) in goods and services in the four quarters ending in the first quarter of 2026, according to July data from the UK government.

Speaking with LBC on Tuesday, British Treasury Secretary Pat McFadden said Israel remained an important trading partner, but insisted that the expansion of the settlements was “wrong.”

The European Union is Israel’s largest trading partner.

Total trade in goods between the EU and Israel amounted to 43.3 billion euros ($50 billion) in 2025, while two-way trade in services totaled 26.6 billion euros ($30.8 billion) in 2024, according to European Commission data.

Reuters contributed to this report.