The danger is not in the vote in Brussels. It is in how compliance departments will implement it.

As the European Commission prepares to lay out trade options before the bloc’s foreign ministers meet on July 13, the debate in Brussels will be framed as a question of principle: how hard to press Israel over the West Bank. But for the European companies that would have to carry out whatever Brussels decides, and especially for those with operations, subsidiaries, financing, or personnel in the United States, the more pressing question is one almost no one in that room is asking: what does American law do to a company that implements these measures the way compliance departments actually implement things?

The answer is unforgiving, and it is not hypothetical. For nearly fifty years, U.S. law has prohibited U.S. persons from complying with foreign boycotts that Washington has not sanctioned. That category is broad: it reaches U.S. companies, the U.S. operations of foreign firms, and controlled-in-fact foreign subsidiaries of U.S. companies, when the conduct occurs in U.S. interstate or foreign commerce. For many of Europe’s largest multinationals, U.S. exposure of this kind is not incidental – it is built into their corporate structure, financing, supply chains, banking relationships, and customer base. The rules were written in response to the Arab League boycott of Israel, and they rest on a deliberate premise: a company should not be permitted to enforce another government’s boycott against a U.S. ally, even when a foreign government issues the order.

This is not a relic of the 1970s. As recently as 2015, Congress reaffirmed the policy in the Trade Facilitation and Trade Enforcement Act, declaring that the United States opposes politically motivated boycotts, divestment, and sanctions against Israel. The European measure under debate would run headlong into a federal commitment that Washington has recently restated.

Here is the part that European policymakers have not thought through. A narrow ban on goods from Israeli settlements, standing alone, could be defended as a territorial customs measure, not a boycott of Israel. But in the real world, geopolitical trade restrictions are often translated by procurement departments, banks, freight forwarders, suppliers, and local agents into broader forms: questionnaires, indemnities, purchase-order clauses,........

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