WASHINGTON—The Trump administration is preparing possible cuts of $250 million in military aid to Iraq, funds already approved by Congress, if the government expels U.S. troops, and is reconsidering a broad spectrum of other economic and military assistance that isn’t yet committed.

The State Department and the Department of Defense have discussed the military assistance funds in emails reviewed by The Wall Street Journal. The emails indicate that the State Department’s Bureau of Near Eastern Affairs is working to cut all...