Trump’s Foreign Aid Shake-Up: USAID Faces Cuts, Shift To State Department

Plan Aims to Match Aid with Geopolitical Interests

The Trump administration has written a proposal to overhaul the distribution of US foreign aid, with the goal of targeting spending on matters more aligned with American geopolitical interests. Under an internal memo seen by Reuters, the proposal includes limiting the scope of aid programs and shifting funds to activities that further national security interests.

The proposal tracks with President Donald Trump and billionaire Elon Musk’s larger effort to reduce the size of the federal government, contending that taxpayer dollars too frequently are wasted on pursuits that fail to benefit the US directly. Trump had already imposed a 90-day suspension of foreign aid, resulting in disruptions in global humanitarian programs.

 

Massive USAID Restructuring

The planned overhaul would sharply cut the US Agency for International Development (USAID), already subject to widespread layoffs and the cancellation of more than 80% of its grants. The memo proposes to replace USAID with a newly titled US Agency for International Humanitarian Assistance, which would deal only with disaster relief, global health, and food security.

Democracy promotion, religious freedom, and women’s empowerment programs would be transferred to the State Department, restricting USAID’s mandate to non-political humanitarian activities. The reorganization is anticipated to increase US soft power while responding to international competitors like China.

 

Legal and Administrative Challenges

The plan has to be approved by Secretary of State Marco Rubio, and it is not clear how much of it will be enacted. Also, a federal judge recently halted the administration’s attempt to disband USAID on the grounds of potential constitutional violations.

In spite of legal battles, USAID administrators have drawn up a transition plan, with a priority on continuing humanitarian programs and the well-being of agency staff. Congress and Rubio will be key to shaping the future of US foreign aid.