The Trump-brokered peace agreement between Azerbaijan and Armenia is reshaping the South Caucasus and advancing U.S. strategic interests, despite lingering opposition in Congress rooted in 1990s-era constituency politics.
The Washington Accords, signed in August, opened critical transport corridors and deepened U.S. partnerships in a region long dominated by Russia and Iran.
President Trump used executive authority to waive Cold War-era aid restrictions. His allies in Congress are moving to repeal them entirely.
“The Trump administration demonstrated a lot of dedication to our agenda of peace,” said Hikmet Hajiyev, foreign policy adviser to Azerbaijani President Ilham Aliyev. “What needs to be appreciated is Trump’s immediate reciprocity and full engagement.”
Some lawmakers continue to advocate for policies that regional experts say inadvertently serve Russian interests by limiting U.S. engagement with Azerbaijan.
“Azerbaijan matters strategically because it is the only country in the world that borders Russia and Iran,” said Brenda Shaffer, a faculty member at the Naval Postgraduate School. “It also borders Turkey through its exclave.”
The administration views Azerbaijan as a reliable Muslim-majority partner aligned with U.S. and Israeli interests.
“Israel and Azerbaijan have a real strategic alliance,” Ms. Shaffer said. “It goes far beyond oil and arms and has been developing steadily for three decades.”
Azerbaijan supplies an estimated 40% to 50% of Israel’s crude oil imports, and Israeli defense firms have been among Baku’s most critical military suppliers. The alliance has held even as much of the Muslim world distances itself from Israel after the war in the Gaza Strip.
The Azerbaijan-Israel connection doesn’t sit well with critics such as Sen. Adam B. Schiff, California Democrat. As a member of the House, he represented Glendale, the most densely Armenian area outside Armenia itself, for more than two decades before his 2024 Senate election.
In April, months before the Trump peace deal, Mr. Schiff accused Azerbaijan of having “echoed the genocidal language and actions” of the Ottoman Empire. He described Azerbaijan’s 2023 military operation as “ethnic cleansing.” He called for the withdrawal of Azerbaijani forces from Armenian territory and the release of prisoners.
Mr. Schiff has been skeptical of treating Azerbaijan as a strategic partner comparable to the Gulf States or signatories to the Abraham Accords.
Resentment lingers in Baku over congressional pressure that led U.S. officials to urge Azerbaijan to release Ruben Vardanyan, a Russian-Armenian oligarch. Azerbaijani officials viewed the intervention as an affront, particularly given Russia’s invasion of Ukraine and Mr. Vardanyan’s Russian business ties.
An anti-Azerbaijan amendment Mr. Schiff introduced to the defense budget in October failed to advance, an outcome that suggests waning congressional appetite for measures that would complicate the Trump administration’s regional diplomacy.
Section 907
At the center of the dispute is Section 907 of the 1992 Freedom Support Act. The provision prohibited most U.S. aid to Baku, though Congress later gave the president waiver authority.
Mr. Trump has used that authority to build support in the South Caucasus for the Washington Accords. The restriction remains in place. It requires annual presidential action to maintain the relationship, a situation the administration and its congressional allies are moving to change.
On Dec. 11, Rep. Anna Paulina Luna, Florida Republican and close Trump ally, introduced legislation to permanently repeal Section 907. The bill has been forwarded to the House Foreign Affairs Committee.
Section 907 was adopted in 1992 as Armenian forces, backed by Russia, launched a military campaign that would eventually occupy nearly 20% of Azerbaijani territory, displacing almost 1 million Azerbaijanis.
The 1992 Khojaly massacre, in which Armenian forces killed hundreds of fleeing civilians, remains seared in Azerbaijani memory. Yet Section 907 punished Azerbaijan, not Armenia.
The occupation lasted until 2020, when Azerbaijan launched a military operation to reclaim its territory. Armenian forces laid extensive minefields before withdrawing. International demining efforts continue. Entire towns were destroyed. Roads, bridges and power infrastructure were dismantled. Cultural sites, including mosques, were systematically vandalized.
The persistence of Section 907 effectively preserves conditions favorable to continued Russian mediation.
The governments of Azerbaijan and Armenia recognize Russia as the common problem, regional analysts say. Reducing dependence on Russian-owned infrastructure has become central to making peace durable.
“The real strategic problem for both Armenia and Azerbaijan today is Russia, not each other,” Ms. Shaffer said.
“The simultaneous restoration of all regional communications — including the Armenia-Turkey border and Armenia’s access via Nakhchivan to Iran — is crucial for Armenia,” said Benyamin Poghosyan, a senior research fellow at the Applied Policy Research Institute of Armenia, an independent Yerevan-based think tank. “Otherwise, the launch of only the Azerbaijan-Nakhchivan-Turkey route via Armenia will not bring lasting stability and security in the region, thus undermining the Washington Declaration.”
This explains the administration’s focus on corridor infrastructure.
“Corridors are not just about trade,” Ms. Shaffer said. “They can include energy lines, electricity connections and fiber-optic cables that reshape long-term dependence.”
The Trump Route
Armenia and the United States are negotiating a joint company to manage railway and highway infrastructure within what the administration calls the Trump Route for International Peace and Prosperity. Armenia is ready to provide simplified transit procedures for Azerbaijan but emphasizes that all regional communications links must open simultaneously.
On Monday, U.S. Ambassador to Armenia Kristina Kvien said Armenia-U.S. relations had reached a “strategic partnership” level. Still, Armenian Foreign Minister Ararat Mirzoyan emphasized that deeper ties with Washington do not mean a rupture with Moscow.
Mr. Hajiyev sees continued restrictions as working against peace. “Both governments, Azerbaijan and Armenia, are making an uphill struggle of strengthening the peace,” he said. “But some in Congress are introducing completely unnecessary and divisive legislative acts.”
Regional analysts have noted a growing divergence between diaspora groups and both governments. The leading Armenian-American lobby group focuses much of its current activity against Armenia’s government.
The warming U.S.-Azerbaijan relationship under Mr. Trump stands in sharp contrast with the previous administration’s approach.
“With the Biden and Blinken administration, unfortunately, we had a lot of misunderstanding, and they inflicted a lot of damage,” Mr. Hajiyev said.
The Biden administration reimposed Section 907 restrictions immediately after the conclusion of the Afghanistan mission.
During Mr. Trump’s first term, the administration “played a crucial role in bringing Caspian gas through the Southern Gas Corridor project for the European market,” Mr. Hajiyev said.
Bilateral trade turnover increased 94% in 2024 to $1.8 billion.
More than 300 U.S.-affiliated companies operate in Azerbaijan. The country has attracted more than $360 billion in investment over the past three decades, with nearly half of it coming from foreign capital.
On the anniversary of the Dec. 25, 2024, downing of an Azerbaijani passenger plane, Baku is pressing Moscow to complete a criminal investigation and provide compensation. Neither has been delivered yet. The Azerbaijan Airlines flight was struck by a Russian air defense system, killing 38 people.
Russian President Vladimir Putin made his first public admission of responsibility in October, nearly 10 months after the incident. One year later, the case remains incomplete.
In a Dec. 30 statement, the Azerbaijani Embassy in Moscow pressed Russia to honor Mr. Putin’s commitments to compensate victims and provide legal accountability. The Russian Foreign Ministry responded with broad language about expanding ties, underscoring growing divergence between the two governments.
The unresolved tragedy has accelerated Azerbaijan’s distancing from Moscow.
Mr. Aliyev skipped a Commonwealth of Independent States summit in Moscow in December.
‘Geopolitical connotations’
Iran’s role as a potential spoiler receives insufficient attention in Washington debates.
“The main factor in Tehran’s hostility toward Baku is that Iran fears Azerbaijan being a source of attraction to its own ethnic Azerbaijani minority, which comprises a third of the population of Iran,” Ms. Shaffer said.
Ethnic Azerbaijanis are Iran’s largest minority group after Persians. Ethnic minorities collectively comprise more than 60% of Iran’s population. None is allowed school in their native language.
“Iran’s policies are driven by geopolitical interests, not religious alignment. When its interests are at stake, ideology is secondary,” Ms. Shaffer said. “For instance, Tehran supported Christian Armenia over Shia-majority Azerbaijan, in a conflict where the Armenians kicked close to a million Azerbaijanis from their homes.”
Regional analysts note that Azerbaijan is viewed as a pressure point on Iran because of its ethnic composition and proximity. Instability inside Iran would have immediate spillover effects across the South Caucasus and Caspian region.
Azerbaijan has accelerated its investment in the Middle Corridor, the east-west transport route linking Central Asia to Europe via the Caspian Sea, bypassing Russia.
Although China views it as part of the Belt and Road, the infrastructure is being built mainly with national and regional capital, allowing Azerbaijan to retain control.
Container throughput at Baku’s main port rose more than 30% in 2025, surpassing 100,000 TEUs.
Azerbaijan has accelerated the reconstruction of its railway in the Nakhchivan exclave, which is separated from the mainland by Armenian territory. The infrastructure will connect through the corridor to Turkey and Europe, independent of Russian or Armenian control.
Last year, Azerbaijan’s state energy company SOCAR acquired a 10% stake in Israel’s Tamar natural gas field for roughly $900 million, deepening energy ties.
Azerbaijan is fostering economic interdependence with Armenia by exporting oil products and facilitating grain shipments to Armenian markets.
“It may seem symbolic, but along with symbolism there’s really important geopolitical connotations,” Mr. Hajiyev said. “We are making peace not only with the government of Armenia, but with the people of Armenia.”
The Trump administration is negotiating the Armenia-United States Strategic Partnership Charter with Azerbaijan, which is expected to expand defense procurement and security cooperation. Full implementation may require permanently repealing Section 907.
Azerbaijan has allocated more than $13 billion from its state budget from 2021 to 2025 for reconstruction in reclaimed territories. The Aghdam Industrial Park and Araz Valley Economic Zone have been established, with plans to resettle 100,000 displaced Azerbaijanis in 2026.
The zones offer investors 10-year exemptions from profit, property and land taxes. International partners, including Japan, are contributing to the development of green energy.
Mr. Hajiyev emphasized that Azerbaijan’s model of religious pluralism positions the country as a natural partner for Western engagement in a volatile region.
“We have Jewish communities, Christian communities living side by side with Muslim communities for centuries,” he said. “This is our tradition, this is our identity. We have stronger determination for our agenda of peace, and we have the full support of the Trump administration.”
