Iran-backed Houthi forces are raising the prospect of a second global shipping choke point in the Red Sea, threatening to deepen pressure on energy markets and global trade as the conflict with Iran intensifies.

The Houthis entered the conflict in early April with missile and drone strikes on Israel and have since warned they could target shipping in the Bab al-Mandeb — a narrow corridor linking the Red Sea to the Gulf of Aden — raising concerns the war could expand beyond the Strait of Hormuz and further disrupt global trade.

Analysts warn that if Houthi forces begin targeting vessels again, it could open a second maritime front in a conflict that has already choked off traffic through the Strait of Hormuz, adding pressure to global energy markets and supply chains.

The Bab al-Mandeb is one of the world’s most critical shipping choke points, handling roughly 12% of global seaborne oil trade and serving as a key gateway for cargo moving between Europe and Asia through the Suez Canal.

Yemen’s Iran-backed armed Houthi group has warned they will move to shutter the Bab Al-Mandeb Strait through missile-drone attacks if Gulf nations join the U.S.–Israel war on Iran.  (Mohammed Hamoud/Getty Images)

TRUMP SEEKS WARSHIPS FROM OTHER COUNTRIES TO HELP SECURE STRAIT OF HORMUZ

The Houthis, formally known as Ansar Allah, are an Iran-backed armed group that controls much of northern Yemen and has been fighting a yearslong civil war against the country’s internationally recognized government.

Houthi leaders, in coordination with Iran, have framed the potential escalation as part of their response to U.S. and Israeli military operations against Iran and its allies, warning they could target shipping or restrict access to the Red Sea if the conflict intensifies.

Iranian official Aliakbar Velayati posted on X on Sunday: “Today, the unified command of the Resistance front views Bab al-Mandeb as it does Hormuz. If the White House dares to repeat its foolish mistakes, it will soon realize that the flow of global energy and trade can be disrupted with a single move.”

The Red Sea has taken on added importance as the conflict disrupts shipping through the Strait of Hormuz, pushing more cargo and energy flows toward alternative routes. That shift has increased reliance on the Bab al-Mandeb — a choke point that handles roughly $1 trillion in goods annually — raising the stakes of any renewed disruption.

Traffic through the Bab al-Mandeb is already running well below normal levels after earlier Houthi attacks pushed major shipping lines to reroute vessels around Africa. Ship-tracking data shows daily transits have fallen to roughly half of typical levels, underscoring that the route is already under strain even before any renewed escalation.

“It’s less about what they can actually do and more about the threat,” former Fifth Fleet commander Vice Adm. Kevin Donegan told Fox News Digital. “Once that risk is there, shipping companies decide not to take it.”

Even limited attacks or threats can drive up insurance costs and push major carriers to reroute vessels around Africa, effectively reducing traffic through the strait without a formal blockade.

The U.S. launched a major air and naval campaign in 2025 — known as Operation Rough Rider — to counter Houthi attacks on Red Sea shipping, after the group began targeting commercial vessels in opposition to Israel’s war in Gaza.

U.S. and allied forces carried out hundreds of strikes on missile launchers, drones, radar systems and other Houthi infrastructure across Yemen in an effort to restore freedom of navigation through the Red Sea.

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The campaign degraded parts of the group’s capabilities but failed to fully eliminate the threat, as shipping companies continued to avoid the route due to ongoing security risks.

Both U.S. and regional experts say the Houthis lack the capability to fully shut down the Bab al-Mandeb, but retain the ability to harass vessels with missiles, drones and small boats — tactics that have previously disrupted shipping across the Red Sea.

Yemeni soldiers patrol the strategic Bab el-Mandeb Strait, Yemen, April 5, 2026. (Abdulnasser Alseddik/AP)

The Houthis field a growing arsenal of ballistic and cruise missiles, anti-ship weapons and drones, much of it derived from Iranian designs. While Iran has long supplied key components through smuggling networks, the group has also developed the ability to assemble and produce weapons inside Yemen — though analysts say those supply lines may now be constrained by the broader conflict.

“They do have the ability to pester international maritime traffic,” Middle East analyst Gregg Roman said, warning that broader attacks could trigger “a severe international response” from the U.S., Israel and Gulf allies.

So far, the Houthis have limited their involvement to strikes on Israel, avoiding the kind of sustained maritime attacks that disrupted global shipping in previous years — a sign analysts say reflects both strategic restraint and pressure from regional actors.

The Houthis entered the conflict last week with missile and drone strikes on Israel and have since warned they could target shipping in the Bab al-Mandeb — a narrow corridor linking the Red Sea to the Gulf of Aden — raising concerns the war could expand beyond the Strait of Hormuz and further disrupt global trade. (Peter Hermes Furian/Getty Images )

Officials and analysts say Iran could still encourage the group to escalate attacks on Red Sea shipping if the conflict deepens, positioning the Houthis as a secondary pressure point in the broader war.

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That dynamic has raised concerns the conflict could evolve into a multi-chokepoint crisis, testing the ability of the U.S. and its allies to keep critical global trade routes open.

Beyond the immediate threat to shipping, Donegan warned that efforts by Iran or its proxies to influence who can safely transit key waterways could challenge long-standing norms of free passage — raising concerns about how similar tactics could play out in other global choke points.

President Donald Trump on Thursday proclaimed that certain imported patented pharmaceuticals and related ingredients could face tariffs of up to 100%, framing the move as a national security measure and intensifying his push to bring drug manufacturing back to the United States.

The proclamation creates a tiered system for drugmakers: companies with Commerce Department-approved plans to onshore production could face a 20% tariff instead, while some firms that strike pricing and manufacturing agreements with the administration could receive zero-tariff treatment for a period.

A senior administration official said the policy amounts to a “100% tax” on drugs produced abroad.

Trump’s proclamation states that imported pharmaceuticals and key ingredients “are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States.”

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The move ties into Trump’s TrumpRx initiative, including TrumpRx.gov, which the White House says will lower prices on some costly brand-name drugs through “Most-Favored-Nation” pricing deals. (Alex Brandon/AP Images)

The move sets up a major clash over the cost and supply of brand-name medicines, as Trump argues the U.S. is overly dependent on foreign pharmaceutical manufacturing while offering lower tariffs to companies that build in America.

According to the proclamation, about 53% of patented pharmaceutical products distributed in the U.S. are produced abroad, while only 15% of patented active pharmaceutical ingredients by volume are made domestically.

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President Donald Trump with Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz. (Pool / Fox News)

Under the framework, imports of patented pharmaceuticals listed in Annex I will face a 100% tariff, unless they qualify for lower rates.

Companies with approved onshoring plans can instead receive a 20% tariff, though that rate rises to 100% in 2030, according to the proclamation.

The administration is using that structure to push companies to shift production to the United States, officials said.

TRUMP RAISES GLOBAL TARIFF TO 15%

President Trump has made lowering drug prices a major priority of his administration.  (Pool / Fox News)

The proclamation also sets lower tariff rates for certain allies: 15% for products from Japan, the European Union (EU), South Korea, and Switzerland, and 10% for the United Kingdom (UK), which could fall to zero under a future agreement.

It also creates a zero-tariff lane for companies that both onshore production and enter “Most-Favored-Nation” pricing agreements with the administration.

Not all drugs are affected. The proclamation says generic pharmaceuticals will not be subject to tariffs “at this time,” and U.S.-origin drugs are also excluded.

The broader push ties into the administration’s TrumpRx initiative, including the recently launched TrumpRx.gov platform, which the White House says gives Americans access to lower prices on some high-cost brand-name drugs through “Most-Favored-Nation” pricing agreements with pharmaceutical companies.

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The tariffs will take effect July 31, 2026, for some companies and Sept. 29, 2026, for others, according to the proclamation.

Trump issued the order under Section 232 of the Trade Expansion Act of 1962, which allows the president to restrict imports deemed a national security threat.

A year ago today, President Donald Trump announced a sweeping new round of global tariffs, escalating trade tensions with key allies and adversaries alike, raising fresh concerns about the outlook for the U.S. and global economy.

The “Liberation Day” tariffs were introduced as a broad set of import taxes that Trump said would correct long-standing trade imbalances and reduce U.S. reliance on foreign goods.

In the months that followed, markets experienced bouts of volatility as businesses and investors adjusted to the shifting trade landscape. Policymakers and economists, meanwhile, debated the longer-term impact on growth, inflation and global trade flows.

Many economists warned of potential consequences, including higher prices, slower growth and rising uncertainty for businesses and investors. 

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President Donald Trump announced his “Liberation Day” tariffs on April 2, 2025, at the White House. (Brendan Smialowski/AFP/Getty Images)

But not everyone agreed.

“Trump proved 12 Nobel Prize economists wrong,” economist Stephen Moore told Fox News Digital.

“Inflation didn’t rise. Why? Because the tax cuts, deregulation and ‘drill, baby, drill’ policies lowered prices and offset the tariffs,” added Moore, a former Trump adviser and co-founder of the free-market advocacy group Unleash Prosperity.

But Moore’s view was not widely shared. Here’s a look back at what other economists said at the time.

Larry Summers

Lawrence Summers, former president emeritus and professor at Harvard University, called the tariff policy “masochistic.” (Ting Shen/Bloomberg via Getty Images)

Former Treasury Secretary Larry Summers called the ‘Liberation Day’ tariffs “masochistic,” saying they were the worst levy the U.S. had imposed in decades.

“Never before has an hour of Presidential rhetoric cost so many people so much,” Summers wrote on X. “The best estimate of the loss from tariff policy is now closer to $30 trillion or $300,000 per family of four.”

Paul Krugman

Paul Krugman, a Nobel laureate, said Trump had “gone full-on crazy” after the ‘Liberation Day’ tariffs were announced. (Gene Medi/NurPhoto via Getty Images)

Paul Krugman, a Nobel Prize–winning economist, said Trump had “gone full-on crazy” in the hours after the “Liberation Day” tariffs were announced.

“If you had any hopes that Trump would step back from the brink, this announcement, between the very high tariff rates and the complete falsehoods about what other countries do, should kill them,” Krugman, a former MIT and Princeton University professor, wrote in his Substack newsletter.

Christine Lagarde

Christine Lagarde, president of the European Central Bank (ECB), at a rates decision news conference in Frankfurt, Hesse, Germany, on Thursday, March 19, 2026.  (Alex Kraus/Bloomberg via Getty Images)

Christine Lagarde, president of the European Central Bank, warned that the tariffs would be “negative the world over,” in an interview with Ireland’s Newstalk.

She said Trump’s trade policy would weigh on global growth and carry broad consequences.

“It will not be good for the global economy, and it will not be good for those who impose the tariffs or those who retaliate,” Lagarde said.

Joseph Stiglitz

Joseph Stiglitz said the Trump administration’s tariffs would “crater the economy.” (Alessandro Bremec/NurPhoto via Getty Images)

Economist Joseph Stiglitz said Trump’s tariff threats have made the U.S. “a scary place to invest” and could unleash stagflation. Stagflation refers to a combination of slow economic growth and rising prices. Stiglitz, a Columbia University professor and former World Bank economist, warned in an interview with The Guardian that he does not see a strong economic outlook ahead.

“I cannot see a really robust economy,” said Joseph Stiglitz, former chair of President Bill Clinton’s Council of Economic Advisers. “I see the global economy suffering greatly from the uncertainty that Trump poses.”

He also said the inflation triggered by the tariffs is moving in the wrong direction and that the only thing the Trump administration will succeed in doing is “to crater the economy.”

Jared Bernstein

Jared Bernstein, chair of the White House Council of Economic Advisors, said the Trump administration may reverse course on tariffs if economic pressures intensify. (Samuel Corum/Sipa/Bloomberg via Getty Images)

Jared Bernstein, the former White House chief economist under President Joe Biden, said the U.S. is a “large, dominant economy” that is relatively closed, meaning it relies less on trade than most countries.

“That means, as Trump has argued, we can hurt other countries more than they can hurt us,” Bernstein said. “But he hasn’t offered a clear rationale for why we should start a trade war with traditionally reliable partners like Canada, Mexico, Japan, and Europe.”

Bernstein said Trump may reverse course if mounting economic pressures—such as higher inflation, slower growth, falling stock prices and rising recession risks—intensify from the tariffs.

“So far, that may have been the approach in Trump’s first term; it doesn’t appear to be the approach this time around,” he said.

Mohamed El-Erian

Mohamed El-Erian, chief economic advisor for Allianz, said the U.S.  (Chris Ratcliffe/Bloomberg via Getty Images)

Allianz chief economic adviser Mohamed El-Erian called for clarity from the White House. “If we get clarity on this, this is an economy that can adjust,” he told FOX Business.

El-Erian, the former CEO of bond giant PIMCO, wrote on X that “the price action in global financial markets in the immediate aftermath of the U.S. tariff announcement points to major worries about global economic growth.”

Bill Gross

Bill Gross, co-founder of PIMCO, said he did not believe Trump would reverse course on tariffs, even if there was economic pressure. (Patrick T. Fallon/Bloomberg via Getty Images)

Bill Gross, the co-founder of Pacific Investment Management Co., known as Pimco, said the latest round of tariffs is “similar to going off the gold standard in 1971″—an “epic” shift that markets won’t quickly recover from.

“It’s not something where you can time a market bottom quickly,” Gross told CNBC. “It’s something we’re going to have to live with as long as President Trump maintains this stance.”

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Gross, dubbed the “Bond King,” added that he does not expect Trump to reverse course. “To be very blunt, President Trump is a macho male, and this macho male is not going to back down tomorrow simply because the Nasdaq is down 5%,” he said.

The prime ministers of Canada and Nordic countries have agreed to continue working to deepen economic ties as technology and international trade are increasingly used as a “coercive tool,” they said in a joint statement.

Prime Minister Mark Carney is concluding his time in Norway meeting with that country’s prime minister, along with the leaders of Denmark, Iceland, Sweden and Finland.

“At a time characterized by heightened geopolitical tension, war and a multitude of crises, we are united in the view that international co-operation, based on international law, shared values and interests, remains the best way to strengthen our common security and prosperity,” reads a joint statement from the leaders after the meeting.

The leaders discussed the need to expand trade and investment ties, as like-minded countries have been upended in recent years in part due to U.S. tariffs and threats to annex Greenland.

Greenland is a self-governing Danish territory.

During a press conference after the meeting, Danish Prime Minister Mette Frederiksen said the old world order is gone and likely not coming back.

“So, we have to build something new and it has to be a world order that is built on the values that we represent,” Frederiksen said.

When asked if the leaders believe threats to Greenland’s sovereignty are over, Carney said Canada and the Nordic nations can work to defend their sovereignty by working together on shared defence, especially in the Arctic, and by deepening economic collaboration

Frederiksen did not respond to that question.

The leaders were asked if they were prepared to stand up to defend Greenland and Denmark if another NATO ally tried to seize the territory — a reference to U.S. statements on the need to take over the island for national security purposes.

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Carney said territorial sovereignty must be upheld and the future of Greenland is up to its people and Denmark.

“We will back that with measures as necessary, as a partner,” Carney said.

“The European Union, and others, have been clear about these fundamental principles and the principle of solidarity has helped to create the space which always should have been there, to be clear, to develop a better security umbrella in the Arctic … So, we’re clear on where we stand and we will continue to stand with Denmark and Greenland.”

U.S. President Donald Trump and NATO Secretary-General Mark Rutte agreed to a framework for a future deal on Arctic security in January.

Trump has said that it would allow “total access” to Greenland. NATO spokesperson Allison Hart said Rutte did not propose any “compromise to sovereignty” in discussions with Trump.

The leaders of both Denmark and Greenland have said that the island’s sovereignty is non-negotiable.

Norwegian Prime Minister Jonas Gahr Store and the other leaders said they also stand with Greenland.

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Carney says Canada ‘fully prepared’ to defend the Arctic in response to Greenland question

“It is for basic principles of international law, national sovereignty and territorial integrity, which is not simply language in schoolbooks. This is hardcore realities for how we preserve freedom, democracy,” Store said.

These hardcore realities include increasing military threats in the Arctic. Carney said that Russia presents the biggest physical security threat, but there are more “layered” threats.

NATO is currently operating its biennial Cold Response training exercises, where 32,000 troops from 14 nations, including the U.S., are conducting a host of military exercises in northern Norway and Finland.

“We need to understand that Russia is our biggest threat, and it will remain a threat for Nordic, Arctic countries. And that’s why we have to go forward to strengthen Arctic security together,” Finnish Prime Minister Petteri Orpo said.

Carney was asked about the status of a joint German-Norwegian bid to supply Canada with submarines, along with the possibility of purchasing Swedish Saab fighter jets, and if that was discussed during the meeting.

Carney said the submarine bids — Korean-based Hanwha is the other competitor — are currently being reviewed and he stressed it is an independent process that he will not get involved in.

Store said he respects the Canadian procurement process.

The joint statement from the six leaders shares a commitment to continue working on Arctic security, deepening trade and investment ties, plus building “prosperous and green economies.”

Before the meeting with Nordic leaders, Carney met with Norway’s finance minister and the CEO of Norges Bank.

Carney is set to leave Norway on Sunday for London, where he is scheduled to meet with Prime Minister Keir Starmer on Monday.

It will be the seventh meeting between the two leaders in just over a year.

Carney is also scheduled to meet with King Charles.

After that, the prime minister will remain in Europe on vacation while the rest of the delegation heads back to Canada on Monday. He stressed Thursday that he will remain in close contact with staff throughout his time off.

—with files from The Associated Press

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