The Houthis sink an arrow into the West’s Achilles’ heel

By David Ignatius

The White House has officially designated April as “Supply Chain Integrity Month.” Houthi rebels in Yemen and a dozen other players that can wreak havoc on global logistics don’t seem to have gotten the message.The Houthis are a tribal militia in a faraway country that many Americans couldn’t identify on a map. But they have the ability to disrupt world markets. For three months, they have been sending missiles and drones toward commercial cargo ships in the Red Sea — and, in the process, altering global shipping flows and insurance rates. Reuters reported on Tuesday that just in the past week, risk premiums for ships traveling the area had increased by more than 40 percent.

The Houthis have what might be called bottleneck power. They command the narrow passageway into the Red Sea, which allows them to sabotage a vulnerable point in the global supply chain. This ability to exploit chokepoints is an increasingly important but little-discussed weakness in the global economy — one that the United States, which boasts of its role as guarantor of freedom of navigation, seems almost powerless to prevent.

U.S. military threats didn’t deter the Houthis, who began firing missiles at cargo ships in November in a supposed protest against the war in Gaza. A U.S.-led coalition of more than 20 countries, hubristically called Prosperity Guardian, didn’t stop the attacks, either. Maersk and Hapag-Lloyd, two of the biggest global shipping companies, announced on Jan. 2 they would stop using the Red Sea route because of the Houthi missiles.

The United States and Britain finally took military action on Jan. 11, striking more than 60 Houthi targets with more than 100 precision bombs, and U.S. forces attacked again the next day. Even that didn’t stop the Houthis, who struck a U.S-owned cargo ship on Monday, drawing a retaliatory U.S. assault Tuesday against a Houthi missile-launching site.

The Houthis are masters of modern guerrilla war, exploiting the weak points of stronger powers. Saudi Arabia and the United Arab Emirates fought a war against them starting in 2014. The UAE gave up in 2020, and the Saudis agreed to a peace deal last year, which only seemed to embolden the Houthis. They are tough, patient fighters — supplied with weapons, training and intelligence by Iran — and they sit atop one of the world’s most strategic waterways.

Houthi leaders seem to understand that the deeper they draw the United States into conflict, the greater impact they have on the global economy. That’s the lesson of this undeclared war: The United States has overwhelming economic power. But perhaps because it is dependent on global trade and financial flows, it is especially vulnerable to economic attack by such seeming lightweights as the Houthis.

We’ve seen other bottleneck vulnerabilities during the past few years. A giant Panamanian-flagged cargo ship called the Ever Given got stuck in the Suez Canal for six days in March 2021, obstructing more than 350 ships. The delicate thread of global commerce was beginning to unravel when the ship was finally refloated.

The war in Ukraine has been, in part, a battle to control access points and skew commerce. Russian control of the Black Sea allowed it, for a time, to halt Ukrainian grain shipments and spike global food prices — adding to inflation and, worse, threatening famine. Russia’s enemies, identity still unknown, sabotaged the Nord Stream pipeline in September 2022. Ukraine at least twice has attacked the Kerch Strait bridge that links Russia to occupied Crimea.

Paradoxically, the more dominant the United States has become economically, the more vulnerable it is to supply-chain attack. An early demonstration of that dependence was the 1974 Arab oil embargo, whose destabilizing effects persisted for much of the next decade. Today’s most precious resource is information, and the United States keeps leaping forward with new digital tools. But as cyber technology advances, so do the weapons of cyberwar.

A disturbing example of a U.S. strength that could become a weakness is our dominance of cloud computing — and growing reliance on it. A study to be published Wednesday by the Carnegie Endowment for International Peace focuses on the risk that the theoretically invulnerable cloud could be disrupted by natural disasters, technology failure, human error or other unanticipated factors.

The study cites an estimate by two giant reinsurance companies that potential insurance losses in a cloud-dependent world could be 100 times those before cloud adoption.

The Carnegie study, outlined for me this week by Ariel Levite, one of its three authors, proposes that cloud providers and their clients should agree on “a framework to enhance resilience and trust.” Like giant financial institutions, cloud providers should face regular “stress tests” to see how they would cope with unexpected disasters, Levite explained.

The Biden administration, which took office amid the covid-19 pandemic, recognized the need to protect global supply chains. And the administration’s actions have reduced the United States’ vulnerability to outside disruptions.

But the bizarre little war off the coast of Yemen — and its big potential effect on global commerce — is a reminder of how fragile the logistical network remains. The grandees of the world economy who are gathering this week in Davos, Switzerland, for their annual celebration of globalization should keep an eye on the distant bottleneck at the Bab el-Mandeb, where the system seems very weak indeed.