The Trump administration has begun the process of redesignating Yemen’s Houthis as a foreign terrorist organization (FTO) over the groups’ firing at U.S. warships; violently overthrowing Yemen’s internationally recognized government; launching attacks against civilian infrastructure in Yemen, Saudi Arabia, the UAE and recently Israel; and attacking commercial shipping. After Hamas’s October 7 terrorist attack, the Houthis fired missiles and drones at Israel and significantly disrupted commercial shipping by attacking ships in the Red Sea. Also known as Ansar Allah, the Iran-backed group says these attacks are done in solidarity with Hamas. They have held fire since the Gaza truce took hold on January 19.
The FTO designation carries heavy economic and diplomatic penalties that the administration hopes will help pressure Houthi leadership and shake up the status quo in Yemen but will impact the country’s humanitarian crisis.
USIP’s April Longley Alley explores how this decision might fit into the Trump administration’s broader strategy toward Yemen, how it could affect the Houthis’ approach to the conflict in Gaza, and what it means for ending Yemen’s own long-standing civil war.
What’s behind the Trump administration’s decision to redesignate the Houthis as a foreign terrorist organization?
Longley Alley: The Executive Order that begins a process to redesignate the Houthis as a FTO is not surprising. Before leaving office in 2021, the first Trump administration designated the group as an FTO to “hold Ansarallah accountable for its terrorist acts, including cross-border attacks threatening civilian populations, infrastructure, and commercial shipping.” The Biden administration reversed this decision, not over a disagreement about whether the group qualified as an FTO, but over concerns of its impact on humanitarian conditions and to give U.N. mediators space to end the conflict through an agreement.
In 2022 and 2023, with support from Saudi Arabia and Oman, the U.N. was making some progress towards a roadmap agreement to end the war. However, this was upended by the Gaza conflict and the Houthis’ decision to militarily intervene in support of Hamas and Iran’s Axis of Resistance, including by targeting Israel and ships passing through the Red Sea corridor. In response to their attacks, international support for a peace deal — which would have seen resources flow to the Houthis — frayed. The Biden administration designated the Houthis as a Specially Designated Global Terrorist group (SDGT) — a less severe designation when compared to the FTO — in January 2024 and issued a steady stream of targeted sanctions against individuals and companies supporting them.
The Trump administration is now signaling that they will take a more muscular approach from the outset. The contours of this approach are still unfolding. Will the potential FTO designation be part of a package that also includes other military and political pressure points? Would pressure include more robust military support for the internationally recognized Government of Yemen, which is making their case to the Trump administration? How would these efforts be squared with the desire of Washington’s Gulf allies, particularly Saudi Arabia, to avoid restarting the Yemen war? What is the role of diplomacy and political off-ramps in this new strategy? There are many outstanding questions. But as an opening salvo, the move toward an FTO is a clear way to signal change and to begin to rachet up pressure.
Could this change the Houthis’ strategic orientation regarding Gaza and the Red Sea?
Longley Alley: The Houthis’ positions on Palestine and Israel are ideological and deeply engrained. They believe that Israel is an occupying power that must be defeated and all territory that is currently part of the state of Israel returned to the Palestinians. This position is widely popular in Yemen and the Houthi’s willingness to violently oppose Israel won them popular support for their actions, even as their specific brand of religious belief and repressive practices are deeply unpopular with large parts of the population. No FTO or combination of policy prescriptions is likely to shift their strategic goal regarding Palestine.
However, their capabilities, priorities and tactics are malleable. A confluence of factors led to the Houthis’ willingness and ability to leverage the Red Sea corridor in support of their stated ideological goals. First, over the course of Yemen’s regionalized-civil war, now in its 10th year, they have gradually consolidated control over the northern highlands and part of the Red Sea coast. From here they have acquired new weapons — largely thanks to Iran — capable of hitting Israel and of targeting ships in the Red Sea and beyond. They have established flexible smuggling networks that allow them to resupply, dampening the impact of U.S. and UK strikes attempting to degrade their capabilities.
A U.N.-backed 2022 truce, which was intended to pave the way for a peace deal, also meant that they were free from the distraction of active domestic miliary fronts. Add to this the most important factor: the political opportunity presented by the Gaza war. By attacking Israel and Israeli and Western interests under the banner of defending Palestine, they won political popularity both domestically and regionally. At home, they used the Gaza war to help mobilize thousands of new miliary recruits, to dampen domestic pressure to deliver salaries and to further clamp down on any potential dissent. Yemenis who disagreed with their approach in the Red Sea and regional actors who suffered from it could not critique them publicly for fear of appearing supportive of Israel’s Gaza campaign. In short, for the first time they had the means, the domestic incentives and casus belli to act on their long-established positions.
Altering the facilitating context outlined above is key to shifting their behavior. As a standalone measure, the FTO will not dissuade the Houthi from restarting attacks in the Red Sea. The decision to re-engage in military action there will likely closely hue with events in Israel/Palestine and with the position of Hamas. The Houthis have paused attacks on Israel and in the Red Sea since the Gaza cease-fire began on January 19 and have publicly committed to returning to attacks if the cease-fire is violated. The threshold for violations is intentionally unclear but given their public positions it would be difficult to see how they could not respond if serious military operations resume.
In the short term, the FTO is more likely to elicit a violent reaction from the group. Their modus operandi is almost always to escalate when pressured and, given that their main card is military action, this is what they use. The Houthi-appointed deputy prime minister warned the U.S. against targeting the group or the Yemeni economy saying these actions would be considered an act of war and would elicit a strong response. It is unclear what this threat could mean, but one option would be an escalation against U.S. interests and assets in the Red Sea, opening room to continue attacks absent active combat in Gaza.
How could this impact the conflict in Yemen?
Longley Alley: The impact of a potential FTO designation on the course of the conflict is far from certain. However, a few things are clear. If implemented, the FTO will have serious financial implications for the Houthis. Their leaders do not often travel abroad or have international bank accounts and will therefore not be seriously impacted by the travel bans or asset freezes. However, in so far as the FTO squeezes the larger economy, limiting access to international financing, making it difficult for traders to acquire letters of credit and insurance to import everything from food, fuel to household goods and beyond, the FTO will limit the resources available to the Houthis.
Tragically the Yemeni population will suffer more. Already, 24.1 million people, or 80 percent of the population, are in need of humanitarian assistance and protection. The full impact of the FTO designation on the population in Houthi controlled areas, as well as the unintended effects on the economy in Yemeni government areas, is connected to the details of implementation. The Trump administration has called for a 30-day process to consider the designation, potentially providing space to examine these issues and to explore ways of mitigating the worst impacts on civilians and government-controlled areas, neither of which are the intended target.
An FTO also makes implementation of the U.N.-backed roadmap agreement, at least as it was originally conceptualized, virtually impossible. For example, a core benefit was the payment of public sector salaries. Given Yemen’s limited resources, this would have required significant external support initially. Yet an FTO would criminalize financial payments to the Houthis making this element impossible to implement through the banking system in their areas. Further opening ports and the airport in Houthi controlled territories is also off the table.
Instead, the FTO opens a new phase of pressure and potential escalation. The January 22 Executive Order has sent a clear message to the Houthis that this administration is different and will take a tougher approach. This has created optimism on the side of the Yemeni government, which has welcomed an FTO and is hoping that it is the beginning a package of support from the U.S. to push back against the Houthis financially and militarily — although it is unclear if this package is coming. For their part, the Houthis have denounced the decision and are threatening to retaliate against the U.S. if it is implemented.
While they are threatening the U.S., the more likely point of immediate escalation is domestic. Already they are mobilizing thousands of troops to front lines around Marib, a government-controlled province that has the north’s only oil and gas resources. While the Houthis control the northern highlands and large parts of the Red Sea coast, they possess none of the country’s limited oil and gas resources. If the Houthis were to take Marib, they would acquire resources to help them weather a potential FTO.
It would also have profound implications for other battle fronts, possibly opening the door for them to sweep into other governorates, including resource-rich provinces in the country’s east. A renewed push for Marib puts U.S. ally Saudi Arabia in a particularly difficult position. Marib has held thus far in large part due to Saudi air support. Without this support, the city and its oil and gas resources are exposed. If Saudi Arabia provides it, the Houthis will again turn their guns north at a time when Saudi Arabia wants quiet.
In short, the FTO will shake up the status quo in Yemen. But who will benefit and who will lose overtime is an open question intertwined with multiple variables, including but not limited to the ability of the U.S. to coordinate a larger package of deterrence and incentives with regional and domestic allies.