with a website created in Belgium, hosted on google app engine, which county's laws does my site need to obey? I know that as a company, you have to obey the law of the country where you are based, but how does that go for a website? Do you have to obey to the laws of every country from where inhabitants can visit your site?
In most cases, it's probably hosted in the country your Google account is affiliated with. What types of laws are you worried about violating? The U.S. has started holding foreign web companies to U.S. laws if their intended audience are U.S. citizens. It doesn't matter where your servers are located. So if your site targets U.S. consumers and breaks U.S. laws, then you could face prosecution in the U.S. This was enacted in response to internet gambling sites which were hosted in the Bahamas.
Recently, some U.S. lobbies and politicians have also begun pushing for an internet blacklist bill that would allow the government (and private companies whose influential lobbies are backing this bill) to arbitrarily shutdown access to websites without due process or any opportunity for the accused to defend itself. In fact, even just making reference to a site on this blacklist would be cause for your site to be added to the blacklist as well.
In this case, if you're not in the U.S., you won't face prosecution, but your site would effectively cease to exist for U.S. web users. It's basically an American version of the Great Firewall of China and similar censorship infrastructure that exists in Iran, Saudi Arabia, etc. (the technology for which was conveniently sold to these repressive governments by American companies).
Even though the bill (which copyright lobbies had attempted to push through congress in different guises over the years) was finally passed by the Senate this year, a temporary hold has been placed on it by senator Ron Wyden. But if the overwhelming opposition to it by the general public as well as tech industry heavyweights like Google, Yahoo!, eBay, the EFF, and the founders of Twitter, LinkedIn, and Foursquare, as well as American Express, Reporters Without Borders, Human Rights Watch and others are unable to get the proposed law revoked, then many sites that allows user-generated content, like YouTube, Twitter, etc. would all be in a lot of trouble.
Source: Google App Engine ToS