The Trump Administration’s declaration that Israeli settlements in occupied Palestinian lands are not illegal, was a consequential act – though not for the reasons cited by Israelis or Palestinians. It was also "the nail in the coffin" – though not the "coffin of the peace process"– as some Palestinians have claimed.
The decision was not so consequential with regards to settlements because for the last three and one-half decades, successive American administrations' policies toward Israeli settlements have moved from passive acquiescence to outright acceptance. It was Ronald Reagan who first said that he didn't believe settlements were illegal. And it was George W. Bush who tried to make the distinction between "existing realities" and new settlements. The former, he claimed, had already been built and could remain, while the latter were to be discouraged.
The Israelis took advantage of this loophole and continued to build, knowing that U.S. presidents might complain but wouldn't do anything to stop them. The net result has been that the settlement population in the occupied territories has grown from 50,000 during the Carter administration to 620,000 Israeli settlers even before Trump took office.
Against this background, it's fair to say that the Trump announcement on Israeli settlements didn't reflect any dramatic shift in U.S. policy. It's also fatuous to suggest that it will have any effect on the "peace process." It doesn't end it, kill it, set it back, or slow it down – precisely because there is no peace process, nor has there been one for several years. In reality, pretending that there is such a process has been an illusion projected by the U.S. to control Palestinian behavior and to keep Europeans and Arabs at bay so as to maintain exclusive U.S. control over the "process" and to protect the Israelis from any international sanctions or pressure.
The real significance of the Trump Administration's announcement is something quite different – it demonstrates a flagrant disregard for international law and conventions, the role of the international community, and universal human rights.
We've already seen this attitude on display with Trump's withdrawal from several international agreements negotiated by previous administrations (regarding trade, climate, and arms control), the threats the administration has made to punish other nations who voted against the U.S. at the UN, and the contempt it has demonstrated toward the International Criminal Court and several UN agencies.
On Israel-Palestine issues, the current administration has repeatedly demonstrated this disdain for international law and consensus (e.g., attempting to legitimize the Israeli occupation of East Jerusalem and the Golan Heights or defunding and refusing to acknowledge the rights and even existence of Palestinian refugees). But, and here's the nub of the matter, the legitimacy and applicability of international law and conventions are not up to one bad actor or one rogue nation.
It is here that the behavior of the U.S. has been especially consequential and problematic. The US can't make illegal settlements legal, grant occupied territories to the occupier, or deny refugee status to refugees and their descendants on its own – these are matters of international law, the Fourth Geneva Convention, the Universal Declaration of Human Rights, and scores of UN resolutions passed by the overwhelming majority of the nations of the world. The status of these Palestinian rights remains unchanged, despite U.S. actions. But what has been affected by decades of U.S. disrespect for law and rights and international institutions has been the ability of these rules to be applied and these structures to effectively play their roles in governing the relations among nations and their behaviors toward one another. And this is what is most consequential about Trump's declaration.
It is true that the architecture of diplomacy, the rule of law, and respect for universal rights have long been either ignored or honored only selectively. It's also true that these structures and rules only work when powerful nations adhere to and uphold them. So, when in the past the U.S. has flaunted international law or cherry-picked human rights violators they would condemn, it only served to undercut the rule of law and weaken the architecture of international relations and diplomacy. What Trump has done is take this dismantling of diplomacy and law one step farther, literally casting aside international law and human rights conventions.
This is the real danger posed by his behavior.