At Home and Abroad: Can Yemen’s Government Leverage the Houthi ‘Terrorist Designation?’

Upon returning to the White House, President Donald Trump reinstated Yemen’s Houthi militia on the U.S. list of Foreign Terrorist Organizations (FTO), reigniting debate over the impact of the designation on the Iran-backed militia.

Trump signed an executive order on January 22, 2025, reclassifying the Houthis as an FTO, reversing the decision made by his predecessor, Joe Biden, who had removed the designation in 2021.

Following the outbreak of Operation al-Aqsa Flood on October 7, 2023, and the Houthis' intervention against “Israel”—targeting commercial ships in the Red Sea and the Gulf of Aden in support of the Palestinians—Biden placed the group on the Specially Designated Global Terrorists (SDGTs) list in 2024.

The SDGT designation primarily freezes assets and restricts financial transactions, with some exemptions for humanitarian aid. In contrast, the FTO label carries stricter penalties for violations and is enforced by the U.S. State Department.

‘A Clear Message’

Yemen’s internationally recognized Prime Minister, Ahmad Awad bin Mubarak, praised the reclassification of the Houthis, stating that the absence of pressure on them had extended Yemen’s conflict for more than a decade.

In a televised interview on January 24, he described the move as a “step in the right direction,” signaling a “clear and crucial message” from the U.S. and the international community to curb the militia’s influence.

Bin Mubarak emphasized the need for a comprehensive approach to Yemen’s crisis—one that considers political, security, and economic dimensions rather than focusing only on humanitarian concerns.

During a visit to Washington on January 20, where he met with U.S. officials and lawmakers, he asserted that the FTO designation would help cut off the Houthis' financial resources and limit their domestic and international activities.

Speaking to Yemen’s official news agency SABA on January 26, he described the measure as a “legal and economic tool” to isolate Iran’s regional proxies, adding that it could finally apply the pressure the Houthis need.

He further argued that the move was necessary to prevent the militia from exploiting Yemen’s humanitarian and economic infrastructure to fuel its war effort.

“The priority now,” he said, “is to develop a framework for implementing the designation in a way that maximizes pressure on the Houthis while minimizing humanitarian impact on civilians.”

The Houthis condemned the U.S. decision, insisting it would only strengthen their resolve.

In a statement, they declared that the designation would not deter them from their “right to liberation, independence, and sovereignty over all Yemeni territory,” portraying it as an attempt to undermine their fight for justice.

The Houthis also argued that the move was counterproductive to regional stability and peace efforts led by the United Nations.

The militia’s unrecognized foreign ministry in Sana’a urged international organizations and human rights groups to denounce the designation, warning of its potential humanitarian consequences.

The Houthis seized power in Yemen on September 21, 2014, toppling the internationally recognized government and taking control of Sana’a and other major cities. The conflict escalated in 2015 when a Saudi-led military coalition intervened to restore the government, plunging the country into years of war and humanitarian crisis.

Potential Ramifications

Experts believe the designation will expand sanctions on the Houthis and their backers, particularly given the militia’s presence in Iran, Oman, and Iraq. They see it as an indirect move against Tehran.

Yemeni political analyst Nabil al-Bakiri expects the consequences to be political, military, and economic, further isolating the Houthis and tightening financial restrictions at ports, banks, and money transfer channels.

“The sanctions would also impact those living under Houthi rule, as many rely on remittances from relatives abroad,” he told Al-Estiklal.

“The effectiveness of the measure depends on the Yemeni government’s willingness to push forward with efforts to restore legitimacy, as well as Washington’s commitment to enforcement.”

“There is concern that this designation might simply serve as a bargaining chip, pressuring the Houthis to make concessions to the current U.S. administration at the expense of Yemen’s legitimate government,” he warned.

Al-Bakiri also questioned whether the sanctions would apply to all parties involved in Yemen, including major economic stakeholders like China, Japan, and South Korea. “Will everyone comply?” he asked.

“The restrictions on financial transfers, scrutiny of passport holders from Houthi-controlled areas, and potential sanctions on those engaging with the group could further escalate the situation.”

Richard Weitz, a senior fellow and director of the Center for Political-Military Analysis at Hudson Institute, sees the move as a warning that Washington will take a hard line if the Houthis continue to threaten Red Sea security or U.S. interests.

Speaking to Alhurra on January 24, Weitz argued that Trump’s decision also serves to discredit the previous administration’s approach, showing that delisting the Houthis was ineffective.

“Trump aims to drive home the point: The Houthis are nothing but an Iranian proxy,” Weitz said. “Targeting them ultimately puts pressure on Tehran itself.”

Paving the Way for Targeting

Ibrahim Jalal, a Yemeni researcher at the Middle East Institute in Washington, stated that the U.S. decision to reclassify the Houthis as a terrorist organization “deepens the group's political isolation.”

However, he warned that it also freezes roadmap talks and raises the economic and logistical costs for regional and international actors engaging with the Houthis.

In April 2023, Saudi Arabia and the Houthis initiated roadmap negotiations to seek a political solution for Yemen. The process involved direct meetings in Sana’a between Saudi Ambassador Mohammad al-Jaber and Houthi officials, followed by a Houthi delegation's visit to Saudi Arabia, facilitated by Oman.

Though the Houthis had initially described the talks as serious and positive, they have since stalled, particularly after the group began targeting ships in the Red Sea and Gulf of Aden while launching missile and drone attacks on “Israel.”

“The new U.S. administration had chosen not to be swayed by the Houthis’ latest political maneuvers. Instead, Washington opted to confront the threat within its broader strategic context, viewing it as a direct challenge to regional security and international shipping routes,” Jalal posted on X.

“The designation will broaden the scope of sanctions imposed on the Houthis and their direct and indirect supporters.”

“Should the group persist in cross-border attacks, the classification sets the stage for more serious targeting of Houthi leaders and capabilities. It also increases the likelihood of a military operation to fully reclaim the Tihama coast,” he noted.

According to Yemeni researcher Baraa Shiban, the Yemeni government enters this phase with the Trump administration in a relatively stronger position, enjoying greater maneuverability in Washington than it did under Biden. 

During the previous administration, it was pressured to expedite a political settlement with the Houthis without having the upper hand.

On January 26, Alayyam quoted Shiban stating that Yemen's government is now entering a new phase where its perspective aligns with Trump’s administration regarding the Houthis and the resolution of the Yemeni conflict. This, he argued, means that legitimacy will have the upper hand in any political settlement.

Shiban expects a series of escalating sanctions against the Houthis, asserting that their designation as a “foreign terrorist organization” is merely the beginning. He predicts the U.S. administration will intensify pressure on the group's regional partners.

“There is a convergence between the Yemeni government and the new U.S. administration, as both view Iran's role as destabilizing and agree on the necessity of ending Tehran's influence in the Red Sea and halting the flow of Iranian weapons.”

Trump’s executive order, issued on January 22, stated that the Houthis had carried out numerous attacks on civilian infrastructure, including airports in Saudi Arabia, and had launched over 300 projectiles at “Israel” since October 2023.