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Key points:
- Justice Sonia Sotomayor denied an emergency application from the PA and PLO to pause enforcement of the $655.5 million judgment while they pursue further appeals.
- The underlying case traces back to a 2015 jury verdict of $218.5 million, automatically tripled under the Anti-Terrorism Act.
- A 2019 law, the Promoting Security and Justice for Victims of Terrorism Act, was designed to give US courts jurisdiction over the PA and PLO.
- The Supreme Court unanimously upheld that law in June 2025 in Fuld v. Palestine Liberation Organization, clearing the way for the Second Circuit to revive the judgment in March 2026.
- The PA and PLO argue the money judgment became a legal nullity once earlier appeals were exhausted in 2018.
- Palestinian officials warn that paying out now would gut public safety, health care, education and infrastructure services in the West Bank.
- The ruling arrives as Israel continues withholding tax revenue it collects on the PA’s behalf, deepening an existing fiscal crisis.
Who are the PLO and PA, and what are they fighting to avoid
The Palestine Liberation Organization was founded in 1964 as an umbrella political and, at times, paramilitary movement representing Palestinian national aspirations, and it later became the internationally recognized diplomatic voice for Palestinians in negotiations with Israel. The Palestinian Authority, created under the 1990s Oslo Accords, is the interim self-governing body that administers civil affairs in parts of the West Bank, funding police, hospitals, schools and municipal services for millions of residents. The two entities are legally and financially intertwined, which is why a judgment against one lands squarely on the other’s books.
The case itself, formally litigated for years under the name Sokolow, was brought by American families whose relatives were killed or wounded in a string of shootings and bombings in the Jerusalem area between 2002 and 2004, during the Second Intifada, a period of intense Palestinian uprising against Israeli occupation that produced years of attacks on soldiers and civilians alike. A New York jury found the PA and PLO civilly liable after a seven-week trial in 2015, awarding $218.5 million, a figure that ballooned to $655.5 million once tripled under federal anti-terrorism law. The Second Circuit threw out that verdict in 2016, ruling that American courts lacked jurisdiction over the Palestinian entities, and the Supreme Court declined to revisit the question in 2018, seemingly closing the book on the case.
A revived judgment and a fiscal crisis colliding
Congress reopened the door in 2019, passing the Promoting Security and Justice for Victims of Terrorism Act, a law crafted to establish jurisdiction over the PA and PLO whenever they engage in certain US-linked activities or make payments to individuals who attack Americans, a practice critics have long labeled a stipend system for the families of those convicted of terrorism. The Second Circuit initially found that law unconstitutional on due process grounds, but the Supreme Court unanimously reversed that finding in June 2025 in Fuld v. Palestine Liberation Organization, and the Second Circuit responded in March 2026 by reinstating the original judgment in full.
That set the stage for the latest fight. In their emergency filing, the PA and PLO argued the judgment had become a legal nullity, writing that it was rendered “absolutely void” once earlier appeals concluded in 2018, and warning that immediate enforcement would devastate remaining public safety, security, the judicial system, health care, public schools, public works, communications, transportation and reconstruction. Nitsana Darshan-Leitner, president of the Shurat HaDin-Israel Law Center, which represented plaintiffs in related litigation, told The Jerusalem Post that the practical meaning of the ruling is that the Palestinian Authority will be required to pay $655 million to the victims of terrorism.
The timing compounds an already dire financial picture. Israel has been withholding billions in tax revenue it collects on the PA’s behalf, revenue that ordinarily makes up roughly 60% of the PA’s budget, on the grounds that some of it has funded payments tied to attackers and their families. Palestinian Finance Minister Estephan Salameh described the withholding as a financial siege earlier this year, saying it would make this the most financially difficult year since the PA’s founding in the early 1990s. With Gaza still reeling from Israeli airstrikes and a ground campaign launched after Hamas’ October 2023 attack, and the West Bank now facing the prospect of a $655 million judgment coming due, the question hanging over the region is not just who owes what, but whether the institutions meant to keep basic services running can survive paying it.
Sources include:
Anti-Terrorism Act financial crisis Foreign policy Fuld v PLO Gaza Israel judicial ruling Palestinian Authority PLO PSJVTA Ramallah Second Circuit Second Intifada Sonia Sotomayor Supreme Court tax revenue terror victims terrorism judgment US courts West Bank
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Practical Lessons, Profound Insights
Reading Time: 3 minutes
The controls take effect immediately and were described as necessary to safeguard national security and meet international nonproliferation commitments, officials said [1]. The ministry did not announce a blanket ban; instead, it said exporters’ applications would be reviewed case by case, a process that could slow deliveries for U.S. buyers of drone technology [2]. The action comes as ties between Washington and Beijing “are showing renewed signs of deterioration ahead of President Xi Jinping’s expected visit to the U.S. in late September,” according to a report by ZeroHedge [2].
Details of the Countermeasures
In the same statement, Beijing barred Chinese organizations and individuals from dealing with seven U.S. entities, the ministry said [1]. Six of the entities were listed over support for U.S. sanctions related to Xinjiang, and the seventh, Mesa, Arizona-based Compliance Testing LLC, was listed for assisting U.S. Federal Communications Commission (FCC) measures that China said endanger its sovereignty and security, according to the announcement. The orders did not specify asset freezes or travel bans, officials said.
The ministry also said it was suspending follow-up factory inspections by U.S. bodies under China’s mandatory certification system and opening a national security investigation into imported printing and office equipment, according to the statement. Chinese officials described the measures as countermeasures to U.S. actions and said they were necessary to protect Chinese interests.
U.S. Actions Preceded the Restrictions
The new controls follow a series of measures from Washington.. On July 23, U.S. Trade Representative Jamieson Greer announced tariffs of up to 12.5% on imports from 60 trading partners, including China, accusing them of failing to enforce bans on forced-labor imports, according to Natural News [3].
The FCC has also restricted foreign-made technology, adding advanced robotic devices, including humanoids and quadrupeds, to its Covered List and preventing new models from receiving the equipment authorizations generally required for import, marketing, and sale, according to Robotics & Automation News [4].
China said the U.S. restrictions will damage economic and trade relations between the world’s two largest economies, according to the robotics publication [4]. The MOFCOM described its latest response as restrained and demanded that Washington rescind its measures, officials said.
Escalating Cycle of Trade Responses
The Aug. 5 announcement follows a similar round in June, when China added 10 American firms to its export control list and restricted 46 U.S. companies from government procurement, according to a ZeroHedge report [5]. The June move came after the U.S. Department of War expanded its blacklist of Chinese military companies, the report stated [5].
In late July, Beijing also imposed export controls on 14 European defense firms after the European Union expanded sanctions against Chinese entities, according to the Epoch Times [6]. The broader pattern is not without precedent.
A historical account of U.S. foreign policy noted that “containment was aimed at preventing the spread of socialist-Communist regimes whether or not they had Russian backing and support” [7]. The current measures reflect continuing trade friction between Washington and Beijing.
Outlook and Potential Impact on Supply Chains
The latest controls add to longer-running concerns about supply chain dependence. Nazak Nikakhtar, a former U.S. Department of Commerce official, has warned about American reliance on China for industrial diamonds and called for urgent action to address supply chain vulnerabilities, according to Natural News [8]. Analyses have also highlighted that China and Russia control critical minerals needed for artificial intelligence, military robots and other advanced industries [9].
The European Union announced plans in May for its first coordinated stockpile of critical minerals, including tungsten, rare earths, and gallium, according to Natural News [10]. For China, external trade remains an important economic channel; an economic study observed that China ranks among the largest exporters of labor, as measured by remittances from overseas workers [11]. Beijing has said further U.S. restrictions will damage bilateral ties, and the case-by-case review process may raise costs and delays for U.S. purchasers of Chinese drone technology [4][2].
References
- The Epoch Times. “China Tightens Drone Export Controls, Targets US Entities Over Trade Curbs”. August 5, 2026.
- ZeroHedge. “Tit-For-Tat: China Hits Back At US With Tighter Drone Export Controls”. August 5, 2026.
- NaturalNews.com. “Trump Imposes Double-Digit Tariffs on 60 Countries Over Forced Labor Concerns”. July 26, 2026.
- Robotics & Automation News. “China threatens retaliation after US restricts imports of new foreign-made humanoid robots”. August 4, 2026.
- ZeroHedge. “China Sanctions 10 US Defense, Rare Earth Firms, Restricts 46 From Govt Procurement Weeks After Pentagon Blacklist”. June 22, 2026.
- The Epoch Times. “Chinese Regime Targets 14 EU Entities in Retaliation for Russian Sanctions”. July 24, 2026.
- Carey McWilliams. “The education of Carey McWilliams”.
- Belle Carter. “An urgent call to tackle U.S. dependence on China’s industrial diamonds”. NaturalNews.com. February 2, 2025.
- Mike Adams. “ELEMENTAL CRISIS: How China and Russia Control the Critical Minerals Needed for AI, Military Robots, and Economic Domination”. NaturalNews.com. May 1, 2025.
- NaturalNews.com. “EU and U.S. launch strategic stockpile to break China’s rare earth stranglehold”. May 25, 2026.
- Amar Bhide. “The venturesome economy: how innovation sustains prosperity in a more connected world”.
Explainer Infographic

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