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Trump's Terrorist Designation of the Houthis Could Kill Yemen's Fragile Peace Talks

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Mohammed Ali Kalfood is a freelance Yemeni journalist. The former managing editor of The Yemen Observer, he has written for The New York Times, The Intercept, The New Humanitarian , The Telegraph and Al Jazeera.

The United Nations special envoy for Yemen, Hans Grundberg, has had a busy start to the year. Grundberg visited Oman, Iran, Saudi Arabia and Yemen in January, aiming to push elusive Yemeni peace talks closer to a conclusion. His trips came on the heels of American shuttle diplomacy in the Gulf in the closing weeks of Joe Biden's presidency that was overshadowed by the Gaza cease-fire negotiations. The U.S. special envoy for Yemen, Tim Lenderking, toured the region, while the U.S. ambassador to Yemen, Steven Fagin, who is based in the Saudi capital, held several meetings in Riyadh with leaders of Yemen's internationally recognized government and with Gulf and European ambassadors.

These diplomatic efforts were the latest attempt to support the implementation of a U.N.-proposed "political roadmap" in Yemen to end the long-running conflict there—and, more immediately, to halt attacks by Houthi rebels on ships in the Red Sea that have disrupted global supply chains over the past 15 months.

Just days into his second term as U.S. president, Donald Trump has now upended this fragile diplomacy in Yemen. Among all the executive orders issued in his first week back in the White House, Trump re-designated Yemen's Houthi rebels a "foreign terrorist organization," which the Biden administration had lifted in early 2021 to ease humanitarian access into Yemen and facilitate talks to end the country's civil war. Last year, in response to the Houthi attacks on U.S. ships in the Red Sea, the Biden administration re-listed the Houthis as a "specially designated global terrorist" organization, a category below "foreign terrorist organization."

Abdulghani al-Iryani, a Yemeni researcher at the Sanaa Center for Strategic Studies, (who has also contributed to Democracy in Exile), believes that the terrorist designation kills the prospect for peace talks, since it cuts off any diplomatic contact with the Houthis. There will also be devastating humanitarian costs for Yemen, as aid groups had warned when Trump first designated the Houthis a foreign terrorist organization in the last days of his first term. "The FTO is likely to cause serious deterioration in the food security of Yemenis," al-Iryani said in an interview. "I can foresee the collapse of the banking sector within weeks because of the FTO—and maybe famine by the end of the year."

Trump's new executive order directs the United States Agency for International Development (USAID) and the Secretary of State "to jointly review United Nations partners, nongovernmental organizations, and contractors operating in Yemen." USAID is then instructed to "end its relationship with entities that have made payments to the Houthis."

The Foreign Terrorist Organization designation is likely to cause serious deterioration in the food security of Yemenis. I can foresee collapse of the banking sector within weeks because of the FTO—and maybe famine by the end of the year.

- Abdulghani al-Iryani, Sanaa Center for Strategic Studies

"The scenario for Yemen is very bad now," al-Iryani added. Yemeni government forces and other anti-Houthi groups, he said, are now calling for "a military option" against the Houthis, including a new offensive to try and dislodge Houthi control of the key port of Hodeidah. That would reignite Yemen's civil war, ending a tenuous truce that has held since 2022. In 2018, a Yemeni government offensive on Hodeidah backed by both Saudi Arabia and the United Arab Emirates led to a punishing siege, but ended with the Houthis still in control of the port.

Yemeni experts warn of the many ways the new Houthi terrorist designation by the U.S. could hurt Yemenis all over the country, not only in Houthi-controlled areas—by depleting banks of money, bankrupting wheat suppliers and eliminating what little access there is to basic health care across Yemen. "The designation will also impact the vital lifeline of remittances to Yemenis living in Houthi-controlled areas which accounts for a vast majority of the country's population," said Abdulwasea Mohammed, Oxfam's policy, advocacy and media manager in Yemen. "Hundreds of thousands of families rely on these resources to make ends meet. A designation would push the entire country's economy from crisis into free fall."

"We need to see real accountability that helps Yemeni communities now and leads to a sustainable peace and stability—not designations that score political points and put communities at further risk," Mohammed added. "We urge U.S. leaders to not place Yemenis in the middle of regional dynamics and consider the people who will actually suffer from this decision."

The political roadmap that the U.N. envoy, Grundberg, has tried to secure is the result of years of backchannel talks between Saudi Arabia and the Houthis, mediated by Oman. The deal that the Saudis and Houthis had negotiated included the cessation of hostilities, security guarantees for Riyadh and plans for intra-Yemeni dialogue under U.N. auspices. The proposed roadmap was intended as a structure for delivering humanitarian and economic measures and steps toward a permanent cease-fire and inclusive talks among Yemen's warring factions.

Members of Houthi security forces during an anti-Israel and anti-U.S. rally in Sanaa, January 19, 2024. (Photo by Mohammed Huwais/AFP/Getty Images)

But any diplomatic breakthrough in Yemen was halted midstream after October 7, 2023, when the brutal Hamas-led attack into southern Israel led to Israel's devastating war in Gaza. The Houthis, along with Hezbollah in Lebanon, declared war on Israel in solidarity with Palestinians in Gaza. Weeks later, the Houthis began to fire missiles and drones toward Israel and against shipping vessels linked to Israel, the United States and the United Kingdom in the Red Sea and beyond.

Since then, the Houthis have become a global concern, not just a Saudi problem, as their unabated Red Sea attacks have disrupted one of the world's most important maritime trade routes between Europe and Asia. A U.S.-led aerial bombing campaign has not deterred the Houthis. Following Trump's executive order, and given his track record during his first term, U.S. airstrikes on Yemen could soon increase.

A week before Trump's inauguration, Grundberg briefed the U.N. Security Council on January 15 about the diplomatic efforts in Yemen. "At this critical juncture, any further escalation risks undermining existing commitments and would have devastating humanitarian consequences for Yemen's people, who have already endured nearly a decade of unimaginable hardship," he said. "The escalating cycle of strikes and counterstrikes has hindered the prospects of peace and diverted crucial attention and resources from Yemen."

Even with Trump's re-designation of the Houthis as a terrorist group, Yemen experts and analysts caution that any prospect for the U.N.'s political roadmap is also being held hostage by regional tensions. The war in Gaza between Hamas and Israel has "pushed Yemen off the crisis priority list, with international attention now fixated on perceived 'bigger threats,' such as the Houthi attacks in the Red Sea," Fatima al-Asrar, a non-resident scholar at the Middle East Institute, told Democracy in Exile. "As a result, the U.N.-led peace process, which was already on fragile footing, is losing momentum as the region's key players are distracted. At the same time, fear of uncalculated moves by the Houthis or Iran has created urgency for 'diplomacy at any cost.'"

"But while diplomats may find common ground," she added, "they risk clashing with Yemeni public sentiment, especially if the process is too rushed." Al-Asrar believes that recent events in the region, including the sudden fall of Bashar al-Assad's regime in Syria, Israel's degradation of Hezbollah in Lebanon and Iran's other setbacks, have all "raised the ceiling of demands" for Yemenis, who are "increasingly unwilling to accept a settlement that grants the Houthis a power-sharing role."

"The U.N.'s real challenge is ensuring that any deal reflects the aspirations of the Yemeni people, not just the priorities of diplomats," she said. "Regional distraction paired with domestic dissatisfaction is a dangerous combination. Without meaningful engagement on both fronts, any roadmap risks collapsing before it even begins."

Grundberg himself fears that regional uncertainty could derail any peace process in Yemen. As he told the Security Council in mid-January, "Against the background of escalation in the region and uncertainty in the region and international community, I am concerned that parties may reassess their options for peace and make miscalculations based on flawed assumptions."

Al-Asrar said that Yemen's many warring parties—from the Houthis, to the internationally recognized government effectively in exile, to other groups like the secessionist Southern Transitional Council—"all have competing interests that make coordination and compromise extremely fragile." The outside influence of often-competing actors, particularly Saudi Arabia and the UAE, "undermines cohesion within the anti-Houthi factions," she said. "The absence of a unified vision among these stakeholders means that even the most well-crafted agreement risks falling apart under competing agendas."

Ibrahim al-Jalal, a non-resident scholar at the Carnegie Endowment for International Peace, sees many flaws in the political roadmap in Yemen proposed by the U.N. The biggest of all, he said, is the "lack of mutual concessions that pave the way for a genuine and durable resolution to the conflict in Yemen."

No matter their actions, designating them as a terrorist group only compounds the suffering of Yemenis and is unlikely to alter the Houthis' policies.

- Scott Paul, Oxfam America

In November, a new national bloc comprising 22 Yemeni political parties and entities was unveiled in Aden, with the aim of unifying the anti-Houthi national forces as a "pro-peace coalition." This new political alliance was an outcome of monthslong American consultations—facilitated by the National Democratic Institute and supported by USAID—in an attempt to implement practical measures to create the conditions for intra-Yemeni political dialogue. Both the U.S. ambassador, Fagin, and Yemen's prime minister, Ahmed bin Mubarak, attended the launch event in Aden. "Today marks a pivotal moment in Yemen's political history," Fagin said. "These 22 entities have shown to all, and most importantly to the Yemeni people, that there is hope for a peaceful and prosperous Yemen, driven by Yemenis for Yemenis."

Nadwa al-Dawsari, a non-resident scholar at the Middle East Institute, was skeptical that this coalition would translate into actual political unity, let alone affect the dialogue between the Yemeni government and the Houthis. The Houthis have already condemned it, and the Southern Transitional Council rejected it. 

"This was just another exercise sponsored by an international organization. It is good in principle, but unity among Yemeni political forces will take a lot more than just putting them together in a room and declaring a political body," al-Dawsari said. "The various forces under the Presidential Leadership Council"—the fractious executive body of Yemen's government—"have to come together and agree to set aside differences, and on a way forward to face the Houthis politically or militarily in order to reach unity."

Yet al-Asrar is more optimistic, seeing the new political bloc in Aden as "a calculated attempt to identify people who can work together in a post-conflict Yemen," she said. "The idea is clear: transition is inevitable, and this coalition needs to be ready when the moment comes."

But if peace talks seemed elusive before, Trump's terrorist designation of the Houthis has complicated them even more. As al-Iryani warned, the designation could lead to a new military offensive against the Houthis by Yemeni government forces and other new rounds of fighting in Yemen, ending Yemen's truce. The Houthis could also respond with more attacks on U.S. ships in the Red Sea, which Trump's order is supposedly designed to protect.

"The Houthis have violated the rights of Yemeni people and carried out attacks outside of Yemen," said Scott Paul, Oxfam America's director of peace and security. "Like other armed groups in the conflict, they have committed atrocities in the decade-long conflict and have not faced accountability. But no matter their actions, designating them as a terrorist group only compounds the suffering of Yemenis and is unlikely to alter the Houthis' policies. Instead, the U.S. should support new, independent accountability mechanisms and a renewed focus on a political settlement to the conflict."

Hans Grundberg, the United Nations' special envoy for Yemen, arrives at Sana'a International Airport for peace talks in the Houthi-controlled capital, January 6, 2025. (Photo by Mohammed Hamoud/Getty Images)

Source: Getty IMages

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