Trump’s decision to shut down USAID has drawn mixed reactions, with some justifying and others condemning it.

Last week, hundreds of internal contractors working for United States Agency for International Development (USAID) were put on unpaid leave, and some were terminated after President Donald Trump imposed a sweeping freeze on US foreign aid worldwide and placed a 90-day hold on its activities.

“It’s been run by a bunch of radical lunatics, and we’re getting them out,” Trump told reporters about the USAID. “Time for it to die,” added his “governmental efficiency” Czar, Elon Musk. Musk wrote on his social media platform X that USAID was a “criminal organisation.” In a separate post, he declared, “It’s beyond repair and should be shut down.”

The comments by Trump and Musk, whom Trump had appointed to lead the new Department of Government Efficiency (DOGE), have sparked a growing debate over the value and future of USAID.

USAID’s exit from the global scene has caused breast-beating in many quarters, particularly among aid workers and NGOs. But there is also a sense of relief among others who see USAID as a hidden hand of US imperialism.

Disdain for Soft Power

Be that as it may, the move to wind up USAID reflects Trump’s disdain for social welfare and the use of soft power as an instrument of foreign policy. It highlights his preference for transactional relations based on hard economic and political bargaining, with just one objective: the advancement of US interests and the maximisation of tangible benefits for the US. It is completely non-ideological and amoral, if not immoral.

While some applaud his pragmatic approach, which is based on cost-benefit analysis, others worry that China (and, to a smaller extent, Russia) could fill the gap in soft power. That could be to the detriment of America’s ambition to remain an all-embracing superpower. After all, Trump is promoting his “America First” policy to make “America Great Again” both domestically and internationally. The question is: “Can he achieve this solely through economic power backed by military power, without soft power?”

Soft power could well fall into the hands of America’s enemies and rivals. While Russia is incapable of using soft power due to its economic difficulties, China possesses both financial power and technological prowess to push its way into spaces vacated by Trump’s short-sighted decision, using soft power in addition to economic influence.

China has been projecting its Belt and Road Initiative (BRI) not as a one-way street but as a programme of development cooperation for mutual benefit. China also funds social welfare projects and charities outside the BRI framework. It presents itself to the Global South as a non-interventionist aid provider, unlike Western democracies, which promote their model of democratic governance as the universal ideal.

China, on the other hand, is non-interventionist, inasmuch as it does not promote regime change. It prefers to work with existing governments regardless of their human rights or democratic records.

The West accuses China of promoting its authoritarian model in competition with Western democratic values. However, this charge is groundless because President Xi Jinping has described the Chinese model as “socialism with Chinese characteristics,” which, by definition, is unique to China and not replicable. China’s goal is a system of international relations based not on uniformity but on diversity. It follows the old Soviet model, which was based on relations between different social systems, in sharp contrast to the US and Western approach of promoting liberal democracy as a one-size-fits-all solution. USAID had been roped into this task, making it its main objective, though kept under wraps.

After Musk’s criticism, members of Congress took to social media to debate whether USAID could and should be permanently shuttered. Chuck Schumer, the Democratic Party’s leader in the Republican-controlled Senate, said on X, “This’d be illegal and against our national interests.” However, Republican Senator Rand Paul responded, saying, “Abolish USAID and all foreign aid.” Democratic Senator Chris Coons also weighed in on X, arguing that eliminating the agency would make the US “less safe.”

Product of Cold War

USAID, founded in 1961 by President John F. Kennedy, was a product of the Cold War. The Soviets and the Chinese were tom-toming their Communist revolution and governance system as the hope of mankind outside the charmed circle of the rich West. The left-leaning and liberal Kennedy established USAID under the Foreign Assistance Act of 1961 to help developing countries improve their economic, social, and political conditions.

According to the US government’s official website, USAID is the “principal US agency to extend assistance to countries recovering from disaster, trying to escape poverty, and engaging in democratic reforms.”

Before the ongoing freeze, USAID was the world’s largest single donor. In fiscal year 2023, the US disbursed US$72 billion in assistance worldwide, funding everything from women’s health in conflict zones to access to clean water, HIV/AIDS treatments, energy security, and anti-corruption and democracy awareness initiatives.

USAID provided 42% of all humanitarian aid tracked by the UN in 2024. In 2023, Ukraine alone received US$14.4 billion from USAID. The second-highest recipient, Jordan, received US$770 million, while even Afghanistan received US$332 million.

USAID provided over US$1 billion in relief following the Haiti earthquake. Its health programmes have saved lives worldwide, including through the President’s Emergency Plan for AIDS Relief (PEPFAR), which has provided HIV/AIDS treatment to millions. The agency also combats diseases like malaria and tuberculosis through vaccination efforts. Additionally, it promotes democratic governance by supporting anti-corruption measures, election monitoring, and independent media.

The agency’s impact is evident in various case studies, such as its efforts during the Ebola outbreak in West Africa and the Power Africa initiative, which has improved access to clean water and renewable energy.

Criticisms

Criticism of the agency has ranged from its foreign policy agenda to its inefficiency. In 2014, USAID was accused of secretly creating a “Cuban Twitter” called ZunZuneo to stir unrest and undermine the Cuban government. USAID denied the charge. In 2023, Mexico’s president asked the US to stop USAID from funding groups hostile to his government, calling it “contrary to international law.”

In Sri Lanka and India, there is a healthy suspicion of NGOs and their Western benefactors, including USAID. A fringe Sri Lankan group, the “Coalition Against Partition of Sri Lanka,” protested in front of the US Embassy in Colombo, urging Trump to investigate whether USAID funding was used to oust former leader Gotabaya Rajapaksa through mass protests and to take action against the current US ambassador for promoting LGBTQ rights among Sri Lankan children. The group reminded Trump of his statement that “there are only two genders: male and female.”

In India, right-wing Hindu supporters of Prime Minister Narendra Modi accused the US philanthropist and democracy campaigner George Soros of promoting groups to dislodge Modi from power. In Bangladesh, pro-Hasina groups charged Soros with funding the movement that ousted her last year.

Although the US has portrayed its foreign aid programmes as efforts to strengthen young democracies, it also used USAID to support friendly authoritarian regimes during the Cold War, including Taiwan and South Korea under military rule and the Democratic Republic of the Congo under Mobutu Sese Seko.

An audit conducted at the behest of USAID by the public accounting firm Williams, Adley & Company highlighted inefficiencies and bureaucratic challenges, particularly regarding indirect cost rates. “USAID does not have proper documentation to support indirect costs charged,” the auditors noted.

Advantage to China

Western analysts have noted that China’s influence in Latin America and sub-Saharan Africa has been growing, as it has become an increasingly important trading partner and investor in recent years. In October 2024, the China Development Bank (CDB) announced that it had provided about US$160 billion to help finance hundreds of projects throughout Latin America. Closing USAID would thus be a boon to China.

Writing in The Guardian, Helen Davidson and Amy Hawkins quote Prof. Huang Yanzhong, a senior fellow for global health at the Council on Foreign Relations, as saying that Trump’s decision provides China with a perfect opportunity to renew its soft power projects and reassert its global leadership. More than one analyst has described the shuttering of USAID as a “self-inflicted wound.”

In 2018, the Chinese government established the standalone China International Development Cooperation Agency, or China Aid, to streamline its spending, including its foreign investment programme, the Belt and Road Initiative (BRI). Beijing does not disclose its foreign aid budgets, but a study by William & Mary’s Global Research Institute found that China lent US$ 1.34 trillion to developing nations between 2000 and 2021, mostly through the BRI.

While China Aid operates differently from USAID, focusing more on loans and highly visible infrastructure projects rather than partnering with local organisations, both agencies share similar objectives – spreading their respective governments’ soft power and influence, The Guardian said.