U.S. Halts Dollar Shipments to Iraq Amid Rising Tensions

The Trump administration has stopped U.S. dollar shipments to Iraq and paused security cooperation with Iraqi military, urging Baghdad to dismantle Iranian-backed militias. Recent actions include blocking a $500 million delivery and suspending counter-terrorism funds, as the U.S. attributes drone attacks in Baghdad to Iran-aligned militias.

The administration of U.S. President Donald Trump has taken significant steps to curb Iranian influence in Iraq by halting U.S. dollar shipments to Baghdad and freezing security cooperation programs with the Iraqi military.

Recent reports suggest that the U.S. Treasury Department blocked a shipment of nearly $500 million in U.S. banknotes from being transferred to Iraq. This money was the result of Iraqi oil sales held in accounts at the Federal Reserve Bank of New York, according to the Wall Street Journal.

In addition, the U.S. has decided to suspend funding for certain counter-terrorism and military training programs. American officials are pressing Iraqi authorities to dismantle armed groups linked to recent drone attacks on U.S. diplomatic facilities, which have been blamed on Iran-aligned militias.