Impact of Trump freezing USAID foreign aid

Source: The post Impact of Trump freezing USAID foreign aid has been created, based on the article “How will freeze on USAID affect the world?” published in “The Hindu” on 12th February 2025

UPSC Syllabus Topic: GS Paper2- International Relations-Effect of policies and politics of developed and developing countries on India’s interests,

Context: The article talks about U.S. President Donald Trump freezing USAID’s foreign aid for 90 days. USAID staff were placed on leave, and funding was halted. This could harm many countries, including India. Elon Musk and Marco Rubio support restructuring USAID, but critics call it politically motivated.

For detailed information on Trump freezes foreign aid affecting global help read this article here

What is USAID?

1. The United States Agency for International Development (USAID) was created in 1961 to manage U.S. foreign aid.
2. It works in over 100 countries, supporting health, education, food security, and governance.
3. In 2024, it had a budget of $44.2 billion, contributing 42% of humanitarian aid tracked by the UN.

What action did President Trump take?

1. On January 20, President Donald Trump froze USAID’s foreign aid for 90 days. The order aimed to review how funds were used.
2. USAID staff (about 10,000 people) were placed on leave. Only mission-critical personnel remained. A judge temporarily delayed the staff reduction, but the funding freeze continued.
3. Elon Musk, head of the Department of Government Efficiency (DOGE), called USAID a “criminal organization.”
4. Secretary of State Marco Rubio, acting as USAID’s administrator, said the agency needed restructuring. Trump has long criticized foreign aid, arguing that funds should help the U.S. first.

How will this affect other countries?

1. Funding Freeze: USAID supports many nations, including Ukraine, Ethiopia, and Afghanistan. The aid freeze will disrupt ongoing projects.
2. Health Impact: Over six million people could die from HIV/AIDS in four years if funding is cut, according to the UN AIDS agency.
3. Exceptions: While $13.3 million in aid to Haiti was frozen, $40.7 million was allowed for its police force.
4. Job Cuts: Only 294 of 10,000 USAID employees may remain.
5. Criticism: Former USAID administrator Andrew Natsios called this a disaster for the Global South.

What impact will this have on India?

USAID’s funding to India has declined over time. In the last decade, India received about $1.5 billion. In 2024, USAID funded $79.3 million for health programs like HIV/AIDS, TB, and child immunization. The impact may be limited, but some healthcare projects could suffer.

Why is this decision controversial?

1. Limited Overall Effect: USAID’s funding to India has decreased over time. In the last decade, India received about $1.5 billion, which is only 0.2% to 0.4% of USAID’s global funding.
2. Health Programs at Risk: In 2024, $79.3 million was allocated for health programs like HIV/AIDS, TB, maternal and child health, and immunization. These projects may face disruptions.
3. Temporary Suspension of Operations: USAID has asked all partner organizations in India to pause their projects.
4. Government Role: It is unclear if the central or state governments will fund and continue these programs.

Question for practice:

Evaluate the impact of President Donald Trump’s decision to freeze USAID’s foreign aid on global health programs and economies, including its effects on India.