The Trump administration backed Prime Minister Ali al-Zaidi with explicit expectations: Disarm Iran-aligned militias, restore state monopoly on force, create favorable conditions for American business, and curb Tehran’s exploitation of Iraqi sovereignty. Four months later, the opposite is happening. Washington’s bet on al-Zaidi has collapsed because his government is enabling Iran-aligned armed elements to consolidate power within the machinery of the state while continuing to benefit from American financial and political concessions. By accommodating this government, Washington risks undermining its own strategy to dismantle Iran’s regional networks.
By accommodating this government, Washington risks undermining its own strategy to dismantle Iran’s regional networks.
During his White House visit, al-Zaidi promised to disarm and dissolve armed factions by September 30, 2026. The deadline passed without substantive action. His government has also failed to prevent attacks Iraqi militias originated against neighboring countries and the Kurdistan Region. Whether due to incapability or unwillingness, he has also failed to stop cross-border terrorist activity involving Iran’s foreign proxies and Assad loyalists using Iraqi territory as a staging ground.
Al-Zaidi’s inability to project Baghdad’s sovereign authority is nowhere more acute than where Popular Mobilization Forces militias openly mock Iraqi sovereignty, desecrating the American flag while raising Iran’s. Threats against Americans have continued despite the U.S. military withdrawal. Iraqi security forces escorted American vloggers to the Kurdistan Region for their protection. Iraqi security agencies later asked Wall Street Journal correspondent Jared Malsin to leave Iraq to protect his life. Iraqi, European, and American authorities also issued warnings. A prime minister who cannot protect Americans cannot credibly promise a secure environment for American investment.
These security failures reflect political arrangements that preserve factional influence. Al-Zaidi has retained militia-linked staff and advisers appointed by former Prime Minister Mohammed al-Sudani, like Hussein Allawi and the Prime Minister’s Office director Ihsan Al‑Awadi, whose roles are to promote the prime minister through the media. He also has appointed electoral losers from various political blocs to advisory positions and government leadership roles, such as advisor Ala Talabani and the acting head of the Iraqi Atomic Energy Commission, Thanaa Al‑Zajrawi, compensating parties through Iraq’s system of political and sectarian quotas.
Anti-corruption enforcement remains a mechanism for purges, rather than accountability. Meanwhile, the government tolerates Tehran’s exploitation of Iraq’s economy and financial system to evade sanctions and finance its operations. Patronage, selective enforcement, and financial permissiveness protect political allies, preserve factional control, and leave Tehran with channels through which to sustain its influence.
The timing of Iraq’s record budget announcement, alongside the finalization of ministerial divisions and the appointment of Laith Al-Khazali—a sanctioned Asa’ib Ahl al-Haq operative—as deputy prime minister, reveals the underlying political bargain. Iraq’s parliament speaker claimed Washington’s approval. The new Artificial Intelligence and Tourism Ministries will serve as institutional vessels for armed factions to access state resources and shed their militia nomenclature without surrendering their power. The artificial intelligence cooperation agreement between Iraq and Iran, signed under Al-Sudani’s tenure, ensures these ministries will function as channels for Iranian assistance. American companies might gain access to Iraqi AI contracts only by circumventing sanctions and partnering with entities already designated as terrorist organizations.
Washington cannot demand militia dismantlement while facilitating the financial channels and institutional arrangements that sustain them.
The Shi’i Coordination Framework’s announcement of a “State Leadership Council” completes the institutional subjugation. Al-Zaidi transitions from Washington’s envisioned role—confronting pro-Iran factions and creating American-Iraqi opportunities—to functioning as what Kata’ib Hezbollah openly calls a “cashier.” His utility is now securing American waivers that allow Iranian-backed factions to survive and navigate U.S. pressure. Authorizations for flights from Iran to Najaf and earlier permissions for dollar flows demonstrate how Washington’s accommodation has become an instrument of Iranian strategy.
Voices in Washington advocating for indulgence and continuing to overlook this failure would weaken the broader U.S. campaign against Iran-aligned armed groups and political parties. These factions and partners are undermining American objectives. Washington cannot demand militia dismantlement while facilitating the financial channels and institutional arrangements that sustain them. This approach forfeits American leverage at the precise moment Washington should apply it.
Washington must treat the newly allocated ministries and deputy prime minister positions as terrorist entities and operatives and refuse engagement with them. Iraq should face a choice: Sustain the alliance with Iran and accept the consequences of financial isolation, or abandon militias.
