The Trump administration has warned it “firmly opposes” anti-Israel trade measures in an effective warning to Andy Burnham as he considers an embargo on settlement goods, the JC can reveal.
The State Department has told this newspaper that any such move would “subvert US interests” and “undermine peace”.
The uncompromising stance by the US leaves the incoming prime minister facing a potential clash with the White House even before he takes office.
It comes as Ireland has passed a bill banning goods from the West Bank and East Jerusalem, while other EU member states are locked in a row over whether to follow suit. Burnham has already said he is “looking at measures to ban trade in goods with illegal settlements”.
Asked about the Ireland bill, a State Department spokesperson told the JC: “The US government firmly opposes this effort and rejects any efforts to economically isolate, or discriminate against, Israel. Such initiatives subvert US interests in the region and undermine the prospects for peace.”
Burnham, Britain’s next prime minister, is actively considering imposing similar measures.
In a video last week, he apologised for Labour’s earlier approach to the conflict in Gaza, and indicated that he was considering robust measures against Israeli settlements.
Citing a rise in settler violence and what he said was Israeli Prime Minister Benjamin Netanyahu’s attempts “to make a two-state solution impossible”, the MP for Makerfield announced he would consider harsher policies towards Jerusalem.
He said in a video posted on social media: “That’s why we need to do more, which includes looking at further sanctions, both on those involved in the violence in Gaza, but also looking at measures to ban trade in goods with illegal settlements.”
Similar measures are also under consideration by Sir Keir Starmer’s government.
Trade minister Chris Bryant told the House of Commons on July 9 that as “settlements are illegal”, it was the government’s obligation “not to aid or assist the occupation”.
He added: “The immediate corollary of that is that we need to stop UK businesses providing economic support and legitimacy to illegal settlements.
“Of course, we want to design measures to stop trade with settlements in a way that balances that with enabling British businesses and citizens to benefit from a strong trading relationship with Israel and with Palestine.
“That is one of the tricks we have to pull off.”
One of the challenges Bryant alluded to was “that goods move in and out very freely between the illegal settlements and green-line Israel”, but he said it would not be an “insurmountable” challenge.
Additional measures under consideration by the government, as spelt out by the minister were “banning exports of UK services to the illegal settlements”.
Bryant said: “To my mind, it must be completely wrong for a UK business to enable the construction of a block of flats or a road, for instance, in the settlements, by providing finance, insurance, architectural services, logistical support or, as has been referred to in the debate, selling properties in the illegal settlements.”
He added that “banning imports to the UK of services from the settlements” was another measure under consideration.
Bryant said that the government wanted any measures to be “enforceable” and “effective” and “not have unintended consequences on our legitimate trade, for instance in medicines, with green-line Israel”.
“The worst of all possible outcomes would be measures that are morally declaratory but ineffective or ineffectual, and that are not capable of being implemented,” he added.
Chatter about additional sanctions against Israeli settlements comes at a time when new figures show that Israel has moved up to eighth place among nations in Europe and the surrounding region for per capita investment in the UK.
According to a new report from the Department for Business and Trade, 19 Israeli companies either established or expanded operations in the UK from 2024-2025.
Danny Kessler, chair of UK Israel Business, said that increased Israeli investment in the UK “underlines the strategic depth of our trade relationship with the Jewish state. Thousands of British jobs, our national security and the health of the British public all depend on it.”
He went on: “The UK brings world-class innovation to this partnership; Israel brings world-leading technology especially in the field of AI. The resilience of our bilateral trade is cause for celebration and the strongest possible argument for securing a free trade agreement.
“Two democracies, bound by shared values, building shared security and prosperity.”
According to a House of Lords paper, trade between the UK and Israel amounted to £6.2 billion in the four quarters to the end of Q2 2025.
In May 2025, the government suspended talks with Israel over an enhanced free trade agreement, citing concern over the conflict in Gaza.
Despite this, the 2030 roadmap for UK-Israel bilateral relations, agreed under the previous Conservative government, hasn’t been withdrawn despite pressure from some left-wing Labour MPs.
The document names Israel as a “significant partner for Britain’s NHS”, citing that it supplies “one in seven of all medicines” and saves “the UK taxpayer billions of pounds".
It also labelled Israel and Britain’s defence relationship as a “close strategic partnership”, highlighting “extensive defence and security cooperation to tackle shared threats, protect our mutual security interests and develop stronger capabilities”.
As well as a potentially hurting UK-Israel trade, anti-settlement measures could encounter difficulty in the form of anti-BDS legislation in the US.
According to the American Jewish Committee (AJC), 38 US states have some form of legislation aimed at countering measures to boycott Israel.
Citing an example of the potential impact of such measures, the AJC said: “When in December 2021, Ben & Jerry’s announced it would no longer sell ice cream in the West Bank, the Illinois Investment Policy Board chose to divest state pension funds from its British-owned parent company Unilever. But that decision had no effect on ice cream sales or consumption in the US [Unilever is no longer on the list amid a dispute with Ben & Jerry’s].”
In 2019, Florida’s governor Ron DeSantis placed sanctions on Airbnb after the company placed restrictions on property advertisements from Jewish properties in the West Bank. He later reversed this following action by Airbnb citing “willingness to acknowledge when companies correct their mistakes and do the right thing”.
On Monday, the EU was said to be in a deadlock on a proposed trade embargo against goods from the West Bank and East Jerusalem, with Italy and Germany reported to be blocking the measure proposed by states including France, the Netherlands and Spain.
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