Trump puts Houthis back on terror list to pile pressure on Iran

Grave repercussions

Trump's decision could have potentially grave repercussions. Yemen's internationally recognised government, which has battled the Houthis for a decade, welcomed the move and thanked Trump, calling the decision "historic".

Rashad Al-Alimi, head of the Presidential Leadership Council, said: "Yemenis have waited long for justice, especially for those killed, tortured, detained, displaced, or whose homes were destroyed. Designating the Houthis as terrorists is key to accountability and a step toward peace and stability in Yemen and the region."

Yet, the broader reaction in Yemen has been mixed. Some have expressed concern that Trump's designation could stop the Houthis from returning to the negotiating table, imperilling a wider political settlement in the country. 

Saudi Arabia, in consultation with the United Nations and other international mediators, has been working on a roadmap for peace—something many had given up on. By attacking Western commercial and naval ships since November 2023, the Houthis said they were acting in support of Palestinians in Gaza, adding that they would stop when Israel withdrew. 

By doing so, they have sought to evade their domestic peace obligations and instead position themselves as a regional power. They still control the capital, Sana'a, but Yemen remains divided and facing a humanitarian catastrophe.

Majed Al-Madhaji, head of the Sana'a Centre for Strategic Studies, said Trump's decision would "enforce the Central Bank's decisions to relocate banks to Aden (which is outside Houth control), drain resources, and punish any political or financial engagement… with the Houthis".

He added that this would "permanently bury the UN roadmap… It shuts the door to political dialogue and amplifies policies aimed at economically suffocating the group—seemingly to weaken them economically and politically before military action".

Broader impact

Some fear the designation may impact far beyond the Houthis, imposing severe restrictions on banks, businesses, and humanitarian organisations operating across all of Yemen—not just in Houthi-controlled areas.

This would have a huge effect on ordinary Yemenis, particularly those who depend on remittances from relatives abroad. Many of those who support the designation ask what military or economic actions will back it up. As one Yemeni commentator remarked: "America does not fight to liberate peoples on their behalf."

If rumours are to be believed, plans are being drawn up across various capitals to remove the Houthis from power in Yemen. Analysts from Moscow to Beijing appear to agree that the militants have overstepped the mark in their actions. This overreach has elevated the group from being a regional problem to a global issue.

Costly attacks 

Houthi assaults on international maritime routes in the Red Sea, Arabian Sea, Gulf of Aden, and Bab-el-Mandeb Strait have sent ships around the southern tip of Africa, a much longer route. This has added to the cost of transit, not least in terms of the additional time and insurance. Egypt has also lost a big chunk of its dollar revenue from reduced transit fees because the ships that would typically have passed through the Suez Canal on their way to/from Europe are now charting a course around the Cape of Good Hope instead.

Read more: Houthi attacks in Red Sea deal heavy blow to global trade

As well as using drones and missiles to attack ships, the Houthis have also fired their weapons into Israel, repeatedly targeting Tel Aviv, including in July 2024. This drew a response in which the Israelis targeted Al-Hudaydah Port.

The Houthis have few friends in the region, having attacked Saudi Aramco oil facilities over the years, most recently in 2022. The group launched missiles at Aramco's facilities in Jeddah and drones at the Ras Tanura and Rabigh refineries. Weeks earlier, Houthi assaults on the Kingdom led to a temporary drop in output at a refinery, a fire at a petroleum products distribution terminal, and a fire at a refinery in Riyadh.

Yemen's conflict still rumbles on in part because the Houthis have seemed unwilling to help find a political solution despite the UN describing Yemen as "the largest humanitarian crisis in the world".

For many in the West, the Houthis are not just an armed group operating outside the law but a proxy for Tehran, with Iranian weapons and Iranian military direction. One senior Yemeni politician, speaking on condition of anonymity, pointed out that Houthi members often come from some of the most impoverished, illiterate, and underdeveloped regions of Yemen. 

"This means they would lack the capability to develop or operate ballistic missiles or drones," they said. "Iranian and Lebanese Hezbollah military experts are the ones behind every missile or drone launched from Yemeni territory."

Assessing alternatives

Yemen is geopolitically important because it overlooks four strategic shipping lanes, yet it appears not to have been prioritised by the international community or even the region. Its proximity to East Africa should also be of interest to China and Türkiye, given their heavy investments in that region.

The fear is that Yemen "becomes the new Somalia", whereby a lack of central state control gave rise to powerful armed gangs who engaged in piracy. Such a scenario could signal the dismantling of a key Iranian proxy.

Alternatives to Houthi rule may involve the Islah Party, with its Islamic orientation, but sources say it "does not want to assume responsibility alone" and worries that it lacks broader acceptance (despite not being part of the Muslim Brotherhood).  Another is the General People's Congress Party, which has undergone significant changes since the death of its founder, former president Ali Abdullah Saleh.

Yemen is not devoid of leaders, but none can operate effectively in isolation. Each requires a political and military framework of support. Without this, they will struggle against unchecked tribal and militia ambitions. Neighbouring states in the Arabian Peninsula, the Gulf, Egypt, and the Horn of Africa are watching with concern.