The US State Department last week reinstated the Foreign Terrorist Organization designation for Yemen’s Iran-backed Houthi group, fulfilling an order announced by President Donald Trump shortly after he took office. 

This action underscores Washington’s commitment to countering Iran’s proxies and addressing the growing threat posed by the Houthis, whose violent actions have destabilized Yemen and the broader Middle East.

As part of this move, the State Department’s Rewards for Justice program announced it would pay up to $15 million for information leading to the disruption of Houthi financing, signaling a focused effort to cut off the financial resources that sustain the group’s violent campaign.

This decision is a significant step in the ongoing efforts to combat terrorism and limit Iran’s influence in the region.

Secretary of State Marco Rubio emphasized that the Houthis have repeatedly targeted commercial vessels in the Red Sea and Gulf of Aden, in addition to posing a direct threat to US service members.

He underscored that the US will not tolerate any nation engaging with terrorist organizations like the Houthis, especially under the pretense of legitimate international trade. 

This stance reaffirms his country’s commitment to holding such groups accountable and protecting global maritime security.

The Houthis, who seized control of Yemen's capital, Sanaa, in 2014, have expanded their reach through a combination of military aggression and support from Iran’s Quds Force, which has enabled them to carry out sustained attacks, not only against Yemen’s legitimate government but also against civilian infrastructure across the region.

This is not the first time the terrorist group has faced significant actions to curb its influence. In early 2021, the first Trump administration made the same pivotal decision, marking a critical step in isolating the group from global financial networks. 

It severely restricted the Houthis’ ability to access vital funds, resources and weapons, all of which were essential to sustaining their violent campaign.

However, in an unexpected shift, the Biden administration removed the pro-Iran group’s designation shortly after taking office in 2021, claiming that the designation was hindering the delivery of humanitarian aid to Yemen. 

This allowed the Houthis to operate with greater freedom and enabled them to continue their violent activities with no solid consequences.

By reinstating the designation, the Trump administration has sought to correct this mistake and reassert its commitment to combating terrorism in the Middle East. 

The restoration of the designation sends a clear message that Washington will not tolerate the Houthis’ acts of terror and that they will be held accountable for their actions. In addition, it will have far-reaching consequences for their supporters, particularly key backer Iran.

The reinstatement will significantly disrupt the Houthis’ access to international financial systems. The American government will now have the authority to freeze any assets tied to the Houthis within US jurisdiction and block any financial transactions that could benefit the group. 

The terrorist group will be cut off from much-needed funds, preventing it from acquiring weapons, ammunition and other resources that support its ongoing terrorist activities.

This financial pressure may also limit the Houthis’ ability to recruit new members and sustain their violent campaign, particularly if it cuts off the supply lines from Iran. By targeting the group’s financial networks, the US aims to undermine its capacity to carry out attacks and weaken its operational capabilities.

The American decision will also have military and strategic consequences. It gives the US and its allies a stronger legal basis to take military action against the Houthis. 

It allows the US to target Houthi military positions and leaders, as well as their weapons supply chains. 

It also justifies increasing military operations in the Red Sea and Gulf of Aden, areas where the Houthis have targeted commercial shipping vessels. By protecting these crucial maritime routes, Washington and its allies can help safeguard global trade. 

Meanwhile, it also provides further legal grounds for rapidly responding to hostile actions against US Navy warships in the area.