Washington, DC — In a dramatic pivot that has rattled global development circles, the Trump administration's decision to freeze billions of dollars in foreign aid and effectively dismantle the US Agency for International Development (USAID) marks a watershed moment in American foreign policy.

For decades, USAID has been the cornerstone of American humanitarian efforts, delivering more than 60 percent of Washington's international assistance to over 100 countries.

The US agency has also been boosting America's soft power and building strong global partnerships and alliances.

Now, with billions in funds hanging in the balance, the future of these critical programmes — and the millions of lives they touch around the globe — is shrouded in uncertainty.

Dr Jirair Ratevosian, a senior global health security and development leader at the Duke Global Health Institute, says the move to shutter USAID could lead to a breeding ground for instability, migration, and conflict.

"Dismantling USAID and foreign aid activities is a dangerous gamble. It leaves millions without access to life-saving healthcare, education, and humanitarian aid. This void creates fertile ground for instability, migration crises and conflict," Ratevosian, who also worked as a senior adviser at the US Department of State, tells TRT World.

"It's not just short-sighted — it's a threat to global security and America's own safety and influence in the world."

His ominous words highlight the policy's potential to damage America's clout abroad and affect millions of lives globally.

Fatema Z Sumar, Adjunct Lecturer at Harvard Kennedy School and Executive Director of the Harvard Center for International Development, tells TRT World that freezing USAID places millions of lives at risk worldwide.

"Given that USAID represents about 60 percent of US foreign assistance, any freeze or suspension of its programming will have an impact in more than 100 countries where USAID works, with sub-Saharan Africa, Ukraine, Jordan, Afghanistan, Syria and Yemen facing the largest cuts," Sumar says.

According to projections from the US Congressional Budget Office, the government is on track to spend about $58.4 billion on international assistance programmes in the 2025 fiscal year.

While these figures represent just 1.2 percent of the federal budget — a fraction that many grossly overestimate — the impact of these dollars on global health, education and economic development is colossal.

In regions where USAID has long been a lifeline, the sudden halt of aid programmes threatens to unravel decades of progress, experts warn.

Sumar adds, "We have heard from colleagues who work closely with partners in Haiti, where US President's Emergency Plan for AIDS Relief (PEPFAR) and USAID account for more than 75 percent of funding for the country's HIV programme, that when the executive orders were announced, 70 percent of the healthcare workers volunteered to continue working without pay to make sure the patients still received care. 

"This is not sustainable, and the reality of what happens to these individuals when the medicines run out and the healthcare workers stop showing up is extremely dire."

The Trump administration's sweeping reforms, ostensibly meant to cut bureaucracy, have led to a deep conversation in the US and around the world about the true role of American foreign aid.

Experts worry that apart from curtailing direct humanitarian assistance, the aid cut risks igniting a cascade of global instability.

In refugee camps like Cox's Bazar in Bangladesh, where over a million Rohingya depend on consistent aid, any disruption, for instance, can have catastrophic consequences.

The halt in US humanitarian aid has already led to the closure of nearly 80 percent of the emergency food kitchens that provided vital support to those left stranded by Sudan's civil war.

Who will step up?

Trump has taken a hard line against USAID, arguing that the agency has lost its way. In an executive order suspending nearly all foreign aid for 90 days, the US president wrote that the foreign assistance programmes "do not align with American interests and, in many cases, go against American values."

He hasn't minced words, calling USAID "run by a bunch of radical lunatics." Elon Musk, who leads his government efficiency initiative, DOGE, went even further, describing it as a "criminal organisation."

White House press secretary Karoline Leavitt defended the move, pointing to what she called reckless spending. Before its dismantling, she said, USAID had spent $1.5 million to promote Diversity, Equity, and Inclusion (DEI) in Serbian workplaces, $70,000 on a DEI-themed musical in Ireland, $47,000 on a transgender opera in Colombia, and $32,000 on a transgender comic book in Peru.

As the US pivots away from global aid, the question now becomes who — if anyone — will fill this gap.

Currently the largest provider of official development assistance (ODA), the US gave almost twice the amount ($64.7 billion) that the next largest donor, Germany ($37.9 billion), did in 2023.

"There is no country that could immediately step up unilaterally to financially fill the gap. However, other countries, including Germany, Japan, China, the United Kingdom, France, Canada, Norway, Saudi Arabia and the UAE, could increase their contributions to official development assistance (ODA) — although we have not yet seen any political indications or announcements from any of these countries to this effect, and other countries, including the United Kingdom and Germany, could follow America's lead.

"Ultimately, the unilateral withdrawal of US foreign aid leaves a massive hole in the global aid architecture and places millions of lives at risk around the world," Sumar says.

Jake Johnston, director of international research at the Centre for Economic and Policy Research (CEPR), agrees with his Harvard counterpart over the fallout of USAID shuttering.

"It is worth noting that even USAID, which ostensibly focuses on humanitarian assistance, frames its mandate as supporting US national security goals. In terms of US interests, military and humanitarian assistance can work together, but in terms of the needs on the ground, they often work in opposite directions," Johnston reveals to TRT World.

There is little clarity at present on how these changes will ultimately shake out.

"The signals thus far indicate that, to the extent US foreign aid will continue, it will be more overtly political and more reliant on the private sector. For countries on the receiving end, aid is likely to be reduced, and what aid remains is likely to be less effective in actually delivering for communities," Johnston adds.

Trick, Treat, or Aid?

Coincidentally, the complexities of US foreign aid are often compounded by persistent public misconceptions. Many Americans believe foreign aid accounts for as much as 25% of the federal budget when it is, in reality, around 1 percent.

According to international aid groups like Oxfam, the average American taxpayer spends the same amount roughly every Halloween on candies and costumes as they do on US foreign aid.

"Despite the relatively small amount invested in US foreign aid, it has achieved quite a bit. US foreign aid has resulted in a 48 percent decline in malaria death rates since 2006, saving 11.7 million lives, providing 28 million children under five with nutrition, helping more than 92 million women and children access essential and often life-saving care, and saving more than 25 million lives from HIV/AIDS," Sumar adds.

Most experts are quick to warn that a year-long freeze in USAID funding could lead to economic shocks that exceed 1 percent of the Gross National Income (GNI) in several economies, potentially plunging vulnerable nations into deeper crises.

"The truth is global health and development make up only a small percentage of the federal budget, and it's a lot cheaper to prevent an HIV infection than to build a missile," Ratevosian concludes.