The bureau’s role in shaping U.S. counterterrorism strategy is indispensable—but it needs to adapt and be adequately resourced.
The terrorism threat facing the United States has shifted dramatically over the past two decades. Once dominated by Salafi-jihadist networks such as al-Qaeda and the Islamic State (ISIS), the threat landscape today is more diffuse, more localized in some areas, and more integrated into broader geopolitical competition. While these jihadist groups remain dangerous in parts of Africa and the Middle East, emerging challenges now include transnational white supremacist networks and “gray zone” activities from great power rivals like China and Russia.
In this evolving environment, the Department of State’s Bureau of Counterterrorism (CT Bureau) remains a vital node in U.S. national security policy. Secretary of State Marco Rubio is reorganizing the State Department, and the CT Bureau’s standing and funding in the new system are unclear. Diminishing the CT Bureau would be a mistake. The CT Bureau’s role in coordinating policy, building partner capacity, and designating terrorist entities is indispensable—but only if it adapts and is adequately resourced.
The Strategic Value of the CT Bureau
Despite its modest profile compared to the Pentagon or intelligence community, the CT Bureau plays a pivotal role in shaping U.S. counterterrorism strategy. It acts as a bridge between U.S. military and intelligence activities and the Department of State’s regional and functional bureaus. When functioning effectively, it ensures that defense operations and intelligence collection are aligned with broader U.S. diplomatic goals, while also ensuring that diplomacy is informed by operational realities.
Perhaps more critically, the CT Bureau helps sustain and coordinate the counterterrorism efforts of foreign partners. Most of the day-to-day struggle against terrorist organizations is waged not by U.S. troops but by the security services of partner states. This cooperation—often facilitated through intelligence liaison, law enforcement training, and financial sanctions—is orchestrated in part through the CT Bureau. In regions such as the Middle East—where terrorism is deeply intertwined with state failure, insurgency, and regional rivalries—integrating counterterrorism with broader diplomacy is essential. U.S. policy on Israel, Iran, or Syria, for example, cannot be disentangled from the threats posed by Hezbollah, Hamas, the Houthis, and other terrorist actors.
Another reason for the CT Bureau’s continued relevance is the global nature of many terrorist threats. Hezbollah, while rooted in Lebanon, operates across Latin America and Europe. ISIS branches thrive in Afghanistan and sub-Saharan Africa. Placing responsibility for these groups under narrowly defined regional desks would fragment policy and weaken oversight. Just as the U.S. military and intelligence agencies maintain globally oriented counterterrorism capabilities, so too must the State Department.
The CT Bureau has also taken on a key role in addressing the fallout from ISIS’s territorial defeat. For example, the CT Bureau has facilitated efforts to repatriate and prosecute foreign nationals detained in camps such as al-Hol in Syria—described as a “ticking time bomb” by U.S. officials. Repatriation, although politically fraught, remains the best way to mitigate long-term risk.
Counterterrorism Programming: Modest Investments, Strategic Dividends
The bureau’s counterterrorism programs—while small in budgetary terms—offer significant returns on investment. The bureau’s programs and initiatives, such as the Antiterrorism Assistance Program—which helps train and equip international partners to better fight terrorism—and efforts to counter terrorist financing help train and equip foreign law enforcement, improve border security, and enhance judicial capacity in vulnerable states. Costing approximately $300 million annually, these programs are dwarfed by the Department of Defense’s counterterrorism expenditures, yet they are often more efficient and politically sustainable.
These tools are especially vital in fragile states, where the United States lacks the will or resources for large-scale interventions but still faces serious security concerns. For example, Somali forces trained with U.S. assistance are central to the fight against al-Shabaab. Recent aid freezes that cut support to Somali counterterrorism units have weakened frontline capabilities and signaled unreliability to partners—potentially driving them toward other actors like China or Russia.
The CT Bureau must improve internal coordination and increase staffing to maximize these programs’ impact. A persistent over-reliance on contractors and fragmentation within the State Department hamper strategic integration.
The Designation Power: Use, Abuse, and Reform
One of the CT Bureau’s most visible authorities is its role in designating foreign terrorist organizations (FTOs) and state sponsors of terrorism. These designations carry legal penalties, affect visa eligibility, and restrict financial transactions. They also influence private-sector behavior, as banks and technology companies seek to avoid reputational and legal risks associated with sanctioned entities.
However, this tool’s credibility is under threat. Inconsistencies in designations—such as the politicized delisting and relisting of countries like Cuba and North Korea or the uneven application of designations to violent white supremacist and anti-government groups undermine its legitimacy. The same applies to decisions to overlook state support for terrorism from countries such as Pakistan and Russia, which erodes the moral clarity of the U.S. position.
Calls to designate drug cartels as FTOs reflect growing frustration with transnational crime but also risk blurring important legal distinctions. Cartels pursue profit, not political objectives, and are better handled under existing authorities like the Foreign Narcotics Kingpin Designation Act. Expanding the FTO list to include cartels would conflate terrorism with other threats, confuse enforcement priorities, and expose U.S. businesses to unintended legal risks, such as possible charges of terrorism financing if they inadvertently transfer remittances of a cartel member in the United States who is also working a legitimate job.
The designation of the Houthis as a terrorist organization is a cautionary tale. While the group’s attacks on international shipping and targets in Israel warrant a strong response, the FTO designation has had limited material impact while complicating humanitarian aid and diplomatic negotiations. The group is not financially integrated with the global system, and the terrorism-related restrictions primarily harm vulnerable civilians rather than militant leaders.
Policy Recommendations: Preserving Integrity and Enhancing Capacity
Moving forward, the United States must both strengthen and refine the CT Bureau’s mission. First, funding must be sustained—and ideally increased—to support partner-facing programs and internal capacity. The CT Bureau’s influence stems not only from its statutory authorities but also from its ability to marshal resources and personnel to advance policy. Starving it of support reduces U.S. influence and risks letting the Department of Defense and intelligence community dominate counterterrorism policy without sufficient diplomatic involvement.
Second, the designation process must be depoliticized and modernized. Preserving the distinct legal and moral category of terrorism is essential to maintaining international buy-in. Global white supremacist networks and the backers of extremist violence in Russia and China deserve more systematic attention. Simultaneously, the United States must avoid undermining its own credibility by using terrorism designations to label disfavored actors regardless of their actual behavior. Giving the executive branch more flexibility, ironically, would lead to more consistency as the executive branch could then apply or lift various terrorism-related labels with less worry that the resulting penalties would disrupt diplomatic or humanitarian initiatives.
Third, if the State Department undergoes structural reform, it is imperative that a high-level, globally oriented counterterrorism office remain in place. Without a central coordinating entity, counterterrorism risks being diluted amid competing regional and bilateral priorities. This office must have access to the secretary of state, work across bureaus, and liaise effectively with other national security agencies.
Ultimately, counterterrorism is no longer just about defeating insurgent networks in ungoverned spaces. It is about navigating the intersections of ideology, state power, and global conflict. The CT Bureau is uniquely positioned to connect the dots—but only if its tools are wielded with focus, prudence, and institutional support.
– Daniel Byman is a professor at Georgetown University, Lawfare’s Foreign Policy Essay editor, and a senior fellow at the Center for Strategic & International Studies. Published courtesy of Lawfare.
