The Shutdown of USAID: Implications for US International Relations

Sarah Reeves

Introduction

As United States President Donald Trump begins his second term in the presidential office, he embarks on a goal of slashing federal spending. In order to meet this goal, President Trump created the Department of Government Efficiency (DOGE) by an executive order on January 20, 2025. Appointed to head this agency is Elon Musk, who is tasked with examining expenditures of government agencies and regulations and restructuring accordingly. As of now, Musk aims to reduce nearly $2 trillion from the current annual federal budget of $6.75 trillion. 

DOGE’s current target of cuts is the United States Agency for International Development (USAID). Musk believes that it is “time for [USAID] to die,” and that it is “a criminal organization” that is “beyond repair.” On President Trump’s first day in office, he froze all U.S. foreign assistance for 90 days in order to review current processes and ensure that they aligned with his “America First” policies. On February 3rd, the presidential administration announced that they would merge USAID with the State Department, while Musk contradictorily announced that the agency would be shut down entirely. The administration then released, on the next day, an order shutting down all of USAID’s missions overseas. The order also ordered international staff to return to the U.S. and presented a plan to cut the current 8,000 USAID employees down to less than 300 by February 7th. While the execution was not quite as drastic as presented, by February 23rd, all USAID personnel, excluding those deemed essential, were placed on leave, decreasing the number of total employees to around 600. Over a six-week period, approximately 83% of USAID programs were shut down, eliminating 5,200 of the 6,200 global initiatives. Those placed on leave were deemed to be “inessential,” and were notified via email. Although U.S. District Judge Carol Nichols placed a temporary restraining order blocking the administration’s shutdown, pending a trial to determine its constitutionality, the Trump administration and DOGE continue to pursue the shutdown of USAID. While Secretary of State Marco Rubio declared that this act is not meant to end foreign aid completely, the current 90-day freeze may argue the opposite. 

What is USAID?

USAID was created on November 1, 1961, by an executive order from President John F. Kennedy. USAID is an independent government agency that operates within the executive branch under the guidance of the Secretary of State, while its funding comes from Congress. The agency distributes U.S. foreign aid, humanitarian efforts, and encouraging development abroad. Per fiscal year, the U.S. obligates an average of $72 billion for international aid, with about 61% of this aid being dispersed by USAID. Their work across approximately 120 countries helps to fight infectious diseases, build schools to educate children, and provide clean water for developing communities. 

Implications of the USAID Shutdown

USAID has benefited the U.S. by not only maintaining its ruling status in the world order but also by spreading American political and economic ideals through foreign aid. A large reason that the U.S. became the sole hegemon in the global order (maintaining this status into the present day) was through soft power. In addition to military superiority, which is considered hard power, the U.S. seeks to gain global influence, otherwise known as soft power. Soft power is a country’s ability to influence other states without coercive pressure, and it includes spreading the country’s own values, ideals, and culture abroad. These aspects can be disseminated through various means, including propaganda, pop culture, media, religion, health research and materials, and foreign aid. 

With the impending threat of the USAID shutdown, the U.S. will lose one of its most significant instruments of global influence, potentially affecting its status as a hegemon. Formerly, the United States and the Soviet Union existed within a bipolar system, with the two superpowers providing stability and balance to each other’s international power. When the USSR dissolved in 1991, the existing system dissolved alongside it. The United States then sought to reshape the world order and lead the way in this new environment. The creation of USAID played a large role in the U.S.’s ability to maintain its power in the post-Soviet system. However, with the potential decrease of positive influence abroad, states seeking to challenge the U.S. as the primary world power, namely China and Russia, can potentially move in to provide this aid and spread their own influence. 

Throughout the twenty-first century, China has emerged as a major power, through the building up of its military, the development of its economy, and global aid initiatives. With the absence of U.S. foreign aid, the China International Development Cooperation Agency (China Aid), has the opportunity to fill this gap. Even if federal aid funding gets restored following the 90-day freeze, China Aid may have already established new relationships and funding guarantees, making it difficult for the U.S. to restore these relationships given China’s newfound influence. In a similar sense, Russia, which lost its global hegemon status after the Cold War, may also move into areas that the U.S. has abandoned in order to return to its position of power. 

Furthermore, the absence of U.S. federal funding abroad has the potential to hurt relationships with the states receiving the aid. With the removal of funding, which many states rely on for essential humanitarian functions, these states may lose trust in future relationships with the U.S. In the words of Melissa Conley Tyler, the executive director of the Asia-Pacific Development Diplomacy and Defense League, “Who is going to allow themselves to become dependent on U.S. assistance if it’s fickle, if it doesn’t distinguish between allies and adversaries, if it could just be turned off on a political whim.”

Conclusion

Ultimately, with the shutdown of USAID and the freeze on federal funding, the future of U.S. foreign relations is unknown. Not only is there internal strife with thousands of USAID employees now without jobs, but externally, countries scramble either to search for humanitarian funding or to fill in the funding gap that the U.S. leaves in its wake. The United States is now in an interesting position, forced to choose between two directly oppositional goals: exuding influence worldwide through aid or closing itself off in order to decrease what could be deemed unnecessary spending. Regardless of the decisions made in the future, it is clear that the shutdown of USAID has caused strife, both domestically and internationally. How this strife is dealt with will be a defining moment for this administration.