I'm fairly sure you have to either have British citizenship or citizenship in one of the Commonwealth nations to be knighted. Otherwise you receive an honorary knighthood. Also some Commonwealth nations don't allow their citizens to receive honours, for example Canada.
It has to be honorary for U.S. citizens because of the Constitution of the United States's Article 1, Section 9, Clause 8. A U.S. citizen cannot swear an oath of loyalty to the Queen and remain a citizen. That being said, there is a lot of wink-wink-nudge-nudge where the UK is concerned.
Isn't that just a restriction on people holding a political office of some kind?
"No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince or foreign State"
America was founded as an egalitarian republic, free from the aristocratic tyranny of Europe. The purpose of that provision was to keep formal aristocracy out of America, and to keep the U.S. government from adopting similar ranks and privileges here.
I think “And no Person holding any Office of Profit or Trust under them …” is where the question is coming from. Who is them in that sentence? The United States? And if that is so it seems only those in the United States holding an Office of Profit or Trust (whatever that means) are exempted. Citizenhood doesn't seem to come into play.
In fact, should he even end up a British citizen (dual-citizenship, give up his US citizenship, or whatever else), he would automatically become a full knight.
