The U.S. has reclassified the Yemen-based Houthi rebels as terrorists following their second attack on an American-operated ship in the Red Sea. This move is expected to have a significant impact on global trade.
What Happened: The U.S. has re-added the Houthi rebels to its list of terrorist organizations, reported Reuters. This decision comes in the wake of the rebels’ second attack on a U.S.-operated vessel in the Red Sea region on Wednesday.
The Houthi militia, which is allied with Iran, has been targeting ships in the region since November. These attacks have disrupted trade between Asia and Europe and raised concerns among major global powers.
The Houthis have justified their actions as a show of solidarity with the Palestinians and have threatened to expand their attacks to include U.S. ships in response to American and British military actions.
Despite the U.S. listing, the Houthi movement has vowed to continue its attacks on ships heading to Israel. The U.S. has imposed the “Specially Designated Global Terrorist” label to cut off the rebels’ funding and weapons used in these attacks.
The attacks have led to a significant disruption in global trade, with major shipping lines like A. P. Moller Maersk A/S redirecting their vessels to avoid the Red Sea. This has caused a surge in freight rates and war risk premiums for shipments through the region.
Why It Matters: The U.S. decision to reclassify the Houthi rebels as terrorists comes amid a series of escalations in the region. The rebels’ attacks on ships have already had a significant impact on global trade, with major companies like Shell PLC suspending their Red Sea shipments due to security concerns.
However, there have been some positive developments, such as the temporary halt of Iranian arms shipments to the rebels following U.S. and UK airstrikes. The effectiveness of these measures is still being assessed.
Despite these efforts, the situation remains volatile, as seen in the recent Houthi missile strike on a U.S. Navy destroyer in the Red Sea, which was successfully intercepted. The U.S. and its allies are working to prevent further escalations and maintain the security of vital trade routes.
Image Via Unsplash