I am an attorney. While I don't practice much constitutional law (beyond the Full Faith and Credit Clause), it was my forte in law school. Moreover, I am also have a masters in history - something that is quite valuable in this topic. I'm going to try to be as unbiased as possible here and just stick with the facts.
First and foremost: We already HAVE anti-boycott laws relating to Israel. Apparently this is news to nearly everyone on reddit because this part of the conversation is jarringly lacking, here and elsewhere. Here is the website for the Office of Antiboycott Compliance, a sub-agency housed within the US Department of Commerce. To steal their literature, "During the mid-1970's the United States adopted two laws that seek to counteract the participation of U.S. citizens in other nation's economic boycotts or embargoes. These "antiboycott" laws are the 1977 amendments to the Export Administration Act (EAA) and the Ribicoff Amendment to the 1976 Tax Reform Act (TRA)." Additionally, antiboycott provisions in the 1979 Export Administration Act re-compiled and reorganized these laws regarding Israel.
Why did these laws exist? Beginning in earnest in 1973, the majority of the Arab and Muslim world banded together in the aftermath of their attempt to invade Israel on Yom Kippur and launched a new mode of attack. After failing 3 times to exterminate Israel through military means, they decided to wage political war - not on Israel, but on anyone who supported Israel. The infamous OPEC oil embargo was the most memorable facet of this push, and greatly impacted US consumers all over the country. Arab countries would force US businesses to sign a "loyalty oath" promising never to do business with any Israeli or Israeli company (you can find many, many examples of this language on the Office of Antiboycott Compliance's website). These oaths were induced with the sole goal of undermining US foreign policy and hurting Israel's economy against the US's wishes. In response, the US passed laws preventing our own businesses from complying with these international boycotts.
It's important to note that these laws have all passed constitutional muster on numerous occasions. The reason for this is because they are narrowly tailored to achieve a compelling governmental interest. Narrow tailoring: The original laws do not punish privately-led behavior, they punish only boycotts induced by foreign governments. Compelling interest: In this case, the compelling interest is arguably the most compelling government interest of all: US independent foreign policy and, similarly, national security - two interests that have notoriously been the most favorable for upholding a controversial law (for example, Nguyen vs. INS, one of the only recent cases to uphold sex discrimination, did so on the bases of national security and foreign policy.) Although you might think, like this Jacobin article, that "we have a right to boycott Israel," that right ends when you start colluding with a foreign power to thwart US foreign policy. At least, that's how the logic goes, anyway.
So we've established 1.) that antiboycott laws relating to Israel have existed for decades now, and 2.) that they are constitutional. The next big question is: what is this new 2018 law all about, and is it constitutional as well?
The actual text of the law is available here, and I encourage all of you to read it (it's quite short). First though, let's read Congress's short summary. Notice anything strange here? Doesn't this sound...well, exactly like what I described above when I talked about the original 1970s antiboycott laws? Why are the trying to pass laws that already exist? what gives?
Here's the thing (and where my history degree comes in handy): "Boycott, Divest, Sanctions" (BDS) is the leading anti-Israel boycott in the world today - but it did not exist until 2005. That means that the Arab world (and its allies) was boycotting Israel primarily through their requests of their individual heads of state. BDS is not a government. It is a popular movement that comprises millions of people from all over the world. It has, however, been absorbed into many governments - but NEVER at the highest level. I like to cite Palestine itself as a good example of this. You'll find everyone in the Palestinian Authority vocally endorses BDS excecpt, ironically, Mahmoud Abbas, the head of state. BDS is intregrated in some form or another in the governments of 10 other Arab states, but only in the vaguest forms - various ministers, councilmen, legislators, etc. all over the Arab world claim membership and leadership roles. The point? The 1970s antiboycott laws only govern action from foreign governments, not quasi-governmental organizations. Even though BDS is substantially similar to the Arab League Boycott in every other way, it is fundamentally not pushed by foreign governments - only governmental organizations.
It may very well be the case that the purpose of the constitutionally-sound 1970s antiboycott laws was thwarted by the creation of BDS. On the other hand, maybe the laws as written clearly encompasses BDS, no matter the uncertainty. Regardless, Congress want to make it so that any BDS compliance should be punished under the Office of Antiboycott Compliance.
Here is what the bill itself says about the similarity of BDS to the original purpose of the antiboycott laws: "The recent action of the UNHRC [the explicit endorsement of BDS] is reminiscent of the Arab League Boycott, which also called for the establishment of a blacklist and promoted a primary, as well as a secondary and tertiary, boycott against Israel, targeting United States and other companies that trade or invest with or in Israel, designed to harm Israel, any business operating in, or doing business with, Israel, or companies that do business with companies operating in Israel."
As I said before, this is unquestionably a compelling governmental interest. What is up for debate is how narrowly tailored it is, as it not only broadens the definitions of foreign boycott, it also imposes sanctions against US people engaged in any trade or business LIKE activity (broader than trade or business). So there really is some debate here over whether this is narrow enough to meet the requirements of the first amendment.
Thanks for reading.