Last week, National Security Advisor John Bolton announced a major shift in U.S. policy toward Cuba intended, in part, to punish Havana for supporting the Maduro regime in Venezuela. Under the new policy, —Americans will be able to sue any company that “traffics” in property confiscated by the Cuban government during the Cuban revolution. Bolton heralded this step as a way to crack down on Cuba—reversing the Obama administration’s diplomatic outreach and a two-decades-old policy of the United States.

While Bolton said that the decision was targeted at Cuba, it will most likely lead to a wave of lawsuits against European and Canadian companies that “traffic” in confiscated property, further straining U.S. relations with our closest allies. That’s because countries like Spain, Cuba’s third-largest trading partner, have large investments in Cuba, including in the hotel industry and other tourism-related business.

Last week’s action is only the most recent example of the Trump administration’s embrace of extraterritorial sanctions that could impact our allies as much as our enemies. The Trump administration has already targeted European businesses for operating in Iran and pressured European nations to exclude Huawei from their 5G networks. The upcoming clash over the new Cuba policy will intensify trans-Atlantic debate and discord about whether the United States is being too aggressive in its approach to foreign companies for activities occurring outside the United States.

The Trump administration’s decision surprised many because it reverses over twenty years of U.S. policy. In 1996, the Helms-Burton Act was enacted and Title III of the law gave Americans the right to bring claims against any person—including foreign companies—that “traffics in property which was confiscated by the Cuban Government.” However, that provision had a built-in waiver provision that allowed the President to exclude such suits for six months at a time. And every six months, Presidents Clinton, Bush, Obama and—up until now—Trump waived that provision to prevent those suits from being filed.

Now that the Trump administration has allowed Helms-Burton to take full effect, the 5,911 claimants who had their claims relating to confiscated property recognized by the Foreign Claims Settlement Commission can go to court to seek damages. Federal judges will most likely recognize those claims and award the treble damages authorized under the statute. The claims had a combined value of approximately $1.82 billion—but they are now worth far more because they have been accruing 6% interest for around 50 years. What’s more, the claimants include a list of top American corporations who had their assets confiscated in Cuba during the revolution, including Texaco, Coca-Cola, JPMorgan Chase, IBM, and Goodyear Tire. Through a series of mergers, Office Depot is now the owner of a claim that is worth over a billion dollars alone.

While the United States has maintained an economic blockade on Cuba, European and Canadian companies have actively operated in Cuba and will now be likely subject to lawsuits under the Helms-Burton Act. The law is structured so that any company doing business in Cuba—or even benefiting from another company’s business activity in Cuba—could be sued. Significantly, the law defines “traffic[king]” in confiscated property in broad terms, scooping up any company that “sells, transfers, distributes, dispenses, brokers, manages, or otherwise disposes of confiscated property, or purchases, leases, receives, possesses, obtains control of, manages, uses, or otherwise acquires or holds an interest in confiscated property” or “engages in a commercial activity using or otherwise benefiting from confiscating property.” That legal liability mouthful means companies such as Sherritt International, a Canadian mining company that operates a long-ago confiscated nickel mine in Cuba, may face claims for trafficking in confiscated property. Under the broad definition of “traffics” a claimant might also bring claims against other companies, such as Sherritt’s lenders and financial institutions.

This broad approach to targeting foreign companies propelled the Helms-Burton Act into a major issue in U.S. relations with Canada and the European Union since it was passed in 1996. In October of that year, Canada amended the “Foreign Extraterritorial Measures Act,” to specify that “[a]ny judgment given under the [Helms-Burton Act] shall not be recognized or enforceable in any manner in Canada.” The following month, the European Union issued a regulation that blocked EU persons from complying with the requirements of Helms-Burton and mandated non-recognition of any judgement under the Act. Canada and the EU even established “clawback provisions” that create a legal claim against any U.S. person that brings an action against a foreign company. Title III of the Helms-Burton Act was even condemned at the United Nations General Assembly because the “extraterritorial provisions affect the sovereignty of other States and freedom of trade and navigation.”

Now, these dormant tensions will come back to the forefront of U.S. relations with the European Union and Canada. Already, the EU’s foreign policy chief Federica Mogherini and European Trade Commissioner Cecilia Malmström wrote to Secretary of State Mike Pompeo stating that the Trump administration’s decision is “raising serious concerns across the EU,” adding that the European Union “will be obliged to use all means at its disposal” to respond to the implementation of the law and may bring a lawsuit at the World Trade Organization. Madrid will reportedly not only ask the EU to head to the world trade body to challenge the United States, but has already asked Brussels to consider the new Cuba policy before going further in renewed talks over the US-EU trade agreement.

In recent years, extraterritorial sanctions have emerged as a potent tool of U.S. foreign policy – and indeed have proven highly effective against the Iranian and North Korean regimes. But in deploying them, we need to be careful to ensure that they harm our enemies and not our closest friends.

Lee Wolosky and Sam Kleiner practice law in New York at Boies Schiller Flexner LLP. Wolosky is a former U.S. Ambassador and National Security Council official. Kleiner served in the Office of the United States Trade Representative and is the author of The Flying Tigers.