Despite the world being more connected than ever, much international conflict feels disconnected from people’s day-to-day lives when it has no day-to-day effect. Beyond the rational, moral judgements made about foreign conflicts, empathizing with the tragedy and loss, in terms of the direct impact on citizens’ lives, these distant wars are often considered, at best, just national security issues with only higher-order cascading effects. However, the Houthis’ attacks on the Red Sea elevated them from a regional militia with sub-national goals to an international menace with far-reaching consequences for global citizens. The ensuing U.S. military operations showed how defense policy successes and failures aren’t just faraway outcomes, but rather very real tension points with domestic consequences. The U.S.’s operations achieved partial political and tactical victory, but failed to deliver the economic outcomes desired in the first place, largely due to the lack of an extensive mandate, combined with sluggish military progress that incentivized the private sector to adapt away from Red Sea shipping.
With the Suez Canal on one end and the Bab el-Mandeb Strait on the other, the Red Sea is both crucial to global trade and also highly vulnerable to shocks. Both the Canal and the Strait are possible choke points in an already unstable region, and yet 15 percent of global maritime trade volume passes through the Canal.
The Houthis, controlling key regions along Yemen’s Coast, managed to create major disruptions in this trade by attacking passing ships, including civilian liners unconnected to Israel, the main target country of the Houthi campaign. In the first two months of 2024, the volume of trade through the Suez Canal dropped by 50 percent, with tonnage down 70 percent by mid-2024. Furthermore, as companies’ diverted flows went all the way around the Cape of Good Hope, shipping prices increased, causing markups across the board and leading to inflation.
A study by the International Monetary Fund (IMF) provides an illustrative example, projecting that doubling shipping rates tends to lead to an increase in inflation by 0.7 percentage points. In the case of Houthi attacks, which have driven up shipping costs everywhere, the cost to ship a container from China to a West Coast port has gone up 217 percent (a lane-specific value used as an approximate proxy for the broader global spike). Roughly generalizing from this increase, and using the IMF data regarding inflation, it is reasonable to expect an increase in inflation by over an entire percentage point for the U.S. dollar, simply from the Houthi crisis. Such an increase in inflation is a direct cost imposed on American consumers, who now pay more for goods and gain less purchasing power from their incomes.
Given the significant cost to the public and the damage to global trade, the crisis warranted decisive action. The Biden administration launched Operation Prosperity Guardian with the express purpose of protecting maritime shipping and restoring freedom of navigation to the Red Sea, something that would directly affect the American consumer. Whether it was successful is disputed. While data does show an economic easing in 2025 from shipping costs moving back in the direction of pre-conflict levels, the same data also suggests supply and demand (and other economic factors such as industry adaptation) are the explanatory factors, rather than the military operations. Part of this is due to the failure of the military operations to effectively degrade Houthi capabilities.
For military operations to achieve the desired economic outcome of stabilizing prices and restoring faith in Red Sea shipping, operations would need highly expanded mandates to take kinetic action against the disruptive forces. While Operation Prosperity Guardian was almost entirely defensive in nature, the Trump administration’s own Yemen initiative, Operation Rough Rider, took a more offensive approach against the Houthis. The direct attacks on European and allied shipping, plus the overall failure of Operation Prosperity Guardian to restore Red Sea navigational security, warranted kinetic action, with U.S., British, and allied air forces striking key Houthi logistical, personnel, and missile sites. Despite the expanded mandate, Operation Rough Rider was also unsuccessful at actually defeating or degrading the Houthis’ capabilities, according to analysis by the Combating Terrorism Center at West Point. Though it struck several key blows against the Houthis, the operation was rife with challenges and mistakes, from leaked war plans to a near-confirmed strike on a migrant center which killed dozens likely due to bad intelligence, faulty targeting, or sheer negligence.
Operation Rough Rider’s failure comes from a nascent delusion among defense policymakers that sheer air power can win entire wars. However, true deterrence comes from a combined-arms approach of warfare across domains, including ground warfare, information warfare, and psychological warfare. While even more expanded air strikes would certainly help, and completely disabling all Houthi launchers capable of reaching the Red Sea would surely increase faith in the security of the passage, ground power would truly put pressure on the Houthis. However, the U.S. never followed through with a rumored UAE-backed plan to support anti-Houthi militias in ground operations in Yemen. At the same time, the U.S. failed to engage on the root causes of Houthi power, both on the geopolitical front, leaving the Saudis and the ailing Yemeni government out of the process, and at the local level, by not working with sympathizing forces in-country who could be crucial in wresting away the Houthis’ support base.
Ultimately, all the U.S.’s actions weren’t enough to degrade the Houthis to the point where they were no longer a threat to Red Sea shipping. A ceasefire eventually ended Operation Rough Rider, but it was very limited in scope, with a Houthi promise to only end attacks against U.S. ships. Thus, the deal failed to restore international faith in Red Sea security, and attacks continued against non-U.S. ships. Thus, even with the best of intentions, of trying to protect Americans and global citizens from steep shipping prices, U.S. operations failed to achieve the desired domestic outcome.
However, prices didn’t stay high forever. As discussed earlier, 2025 did see some easing, though likely not due to U.S. military action. The slow progress of the campaign and lack of deterrence meant businesses gradually adapted away from the Red Sea. Even though the detours are more expensive, requiring more fuel and keeping crews out at sea for longer, most operations have adapted, according to the New York Times. Therefore, experts do not expect the Israel-Hamas ceasefire to bring about a resurgence in Red Sea maritime activity, even if the Houthis maintain the current pause on attacks motivated by the ceasefire. Even this is tentative, as the Israel-Houthi conflict may reignite despite a persistent ceasefire. Whatever the case, the best long-term play for most firms is to just invest in alternate routes, even if this excludes the possibility of ever bringing costs and shipping times down to pre-war levels. In cases like these, the best way to achieve economic outcomes is through economic means. Using military force to buttress the economy is tough and requires extremely large mandates to bring risks down to manageable levels for firms whose entire operations are often about risk reduction.
Ultimately, the two U.S. military operations in the Red Sea and Yemen were two legitimate attempts at making life better for the average American, which both fell short due to the nature of maritime economic conflict and the decisive results needed to actually convince companies to return to previously high-risk routes. The Houthis, now beaten and bruised like the rest of the Axis of Resistance, have emerged victorious in this aspect of the irregular war they fight against the international community. If nothing else, they’ve proven a dangerous concept — that malign and initially localized proxies can indeed upend parts of the world order and harm citizens around the globe.
Featured Image Source: Sky News
