Charities, diplomats and foreign officials around the world are frantically trying to figure out what will happen to the US agency that doles out over $40-billion in aid for everything from life-saving HIV programmes in Africa to funding for Ukraine amid the Trump administration’s assault on a cornerstone of the country’s global influence.

The US Agency for International Development, an organization that dates to President John F. Kennedy’s attempts to fight Soviet influence in the developing world, is on the brink of collapse. Over the weekend, while the world was distracted by President Donald Trump’s trade war against Canada and Mexico, the body’s website quietly went dark.

“We’re shutting it down,” billionaire Elon Musk, a key Trump ally, said during an X Spaces session after midnight, as aid workers from Nairobi to Dhaka raced to determine the future of maternal health programmes in rural Africa, cholera treatment in Bangladesh and migrant services in Latin America. On Sunday, USAID employees received an email saying the agency’s headquarters in Washington would be closed to staff on Monday, pending “further guidance.”

The US is the world’s largest donor and spent about $68-billion on foreign assistance in 2023 — within a week of taking office, the administration froze it all before partially reversing itself with a waiver that the humanitarian, development and diplomatic worlds are still struggling to interpret.

The move has ground one of the engines of the country’s geopolitical influence to a halt and created an opening for rivals like China, which Washington has long presented as an unreliable and predatory partner for the developing world.

“Trump’s actions are weakening American global leadership and influence,” New Jersey Senator Andy Kim told Bloomberg. “Our assistance abroad helps fight disease and stop starvation and famine, but it’s also a tool to stave off the expansionist reach of authoritarian leaders in China, Russia, and Iran.”

The administration argues the pause is necessary to prevent waste and align spending with its “America first” agenda. Trump also moved to pull the US from the World Health Organization and the Paris climate agreement, which countries from Bangladesh to Yemen look to to mitigate climate change. Meanwhile, dozens of officials have been removed or put on leave from USAID.

During his first term, Trump sought to compete with China by establishing the Development Finance Corporation, a project embraced by President Joe Biden. Unlike the US, most of China’s spending in the developing world comes via government-backed loans for infrastructure projects.

The DFC’s portfolio of $48.9-billion for projects such as a railway through Angola pales in comparison to the $1.34-trillion China lent between 2000 and 2021 to secure access to energy and critical minerals through infrastructure lending. Chinese lending has slowed in recent years, but Beijing still pledged nearly $51-billion over three years in new loans, investment and aid to Africa alone last fall.

“Although Beijing’s willingness to plug a multibillion-dollar hole in foreign aid is likely limited, it is already Africa’s top investor and trading partner, and the freezing of US aid means an opportunity to consolidate its economic and political influence,” according to Bloomberg Economics.

Geopolitical Ramifications

Top global donors including the UK, France and Germany have also cut funding in recent years. But none spend as much as the US, and Trump’s actions will have broad geopolitical ramifications.

Cuts could fuel migration from places like South Sudan — where US aid accounts for 7% of gross domestic product — or piracy from Somalia, where it amounts to about 9% of GDP, according to Bloomberg Economics. And Washington has often turned to foreign assistance as a way to blunt Chinese inroads in the developing world.

Last year, the Biden administration assembled an economic and security assistance package for Gabon in a bid to prevent China from establishing a military footprint there, Bloomberg reported.

Overseas assistance has also been a way for the US to secure its own influence. In a deal last year, Philippine President Ferdinand Marcos Jr. allowed the US access to four additional military facilities in the island nation. USAID funded projects near the sites in a bid to win over local opinion, but those are now in jeopardy.

In 2018, China established a new foreign aid agency but most of its spending in the developing world continues to come via government-backed loans for infrastructure projects. That’s made Beijing by far the biggest external actor in Africa, Southeast Asia and beyond, helping it secure energy and minerals as well as markets for its excess industrial capacity.

Beijing has sought to position itself as a leader of the developing world, viewing its markets as a potential buffer against Trump’s tariffs. At the Group of 20 Summit in Brazil last year, China unveiled proposals to support the Global South, including on technological connectivity, food security and climate change.

Developing countries have largely embraced those initiatives despite growing concern about trade deficits with Beijing from sub-Saharan Africa to Malaysia, and as China’s own economic slowdown raises questions about its ability to spend big in the future.

One Chinese official said the US withdrawal from foreign aid is an act of self-sabotage that could cut Washington off from potential partners, while another expressed confidence that funding would ultimately return because of the importance of aid to US global influence.

Public Health Impact

Confusion is particularly acute in sub-Saharan Africa, which receives the most USAID funding after Ukraine. Uncertainty over its future threatens clean water efforts and could accelerate the spread of various infectious diseases, including Ebola and HIV.

It comes at a delicate time for South Africa, which this year became the first African country to hold the G-20 presidency even as the US leader has made demeaning comments about the continent.

On Sunday, Trump threatened to withhold all future aid to the country because of a land-expropriation law that he seemed to connect to baseless conspiracy theories spread by the South Africa-born Musk about the seizure of land from and the killing of White farmers.

South Africa’s main source of US aid is HIV/AIDS assistance.

A memo released at the weekend aimed at clarifying how the US waiver should be implemented said life-saving HIV care and treatment services can be resumed during the 90-day pause for the more than 222 000 people globally who collect refills of antiretrovirals every day. But experts warn the unpredictability is already impacting public health efforts.

“American expertise in critical areas being removed overnight with no warning is devastating,” said Francois Venter, executive director of the University of the Witwatersrand’s research center for chronic diseases in South Africa.

The effects are already being felt across the Global South. In Bangladesh, a health research institute focused on cholera and malnutrition laid off about 1 000 staff members who primarily work for programmes funded by USAID, according to local media. Meanwhile, grassroots groups assisting migrants have been crippled across Latin America.

In Kenya, where the US supports over 30 000 healthcare jobs, authorities are still unsure which programmes will be exempt from cuts, said Tim Theuri, chief executive of the Kenya Health Care Federation.

“We are for sure going to experience cuts to clinical services,” he said. “For our leaders, this is a wake up call.”