Donald Trump’s decision to shut down USAid has already led to severe consequences for humanitarian aid and development programs globally, while also allowing the US’s primary competitor, China, to gain ground, according to analysts. The abrupt 90-day halt of USAid funding, which constitutes 40% of global foreign aid, has resulted in chaos: employees have been locked out of their offices, humanitarian shipments have been left unattended, and critical assistance has been halted. Development programs worldwide that previously relied on USAid are now in a state of panic, warning of dire risks including increased famine, mortality, and disease.
Trump’s strategy involves merging the over 60-year-old USAid into the State Department, which will reduce its workforce and align its funding with his administration’s priorities. However, analysts argue that this move undermines a crucial goal: countering China’s influence. “The US is essentially giving China a golden opportunity to expand its influence at a time when its economy is struggling,” stated Prof. Huang Yanzhong, a senior fellow for global health at the Council on Foreign Relations. “What Trump is doing is essentially providing China with the perfect chance to revitalize its soft power initiatives and regain its position in global leadership.”
Many analysts have characterized the closure of USAid as a “self-inflicted wound.” The global landscape has been shaped by the ongoing competition between the US and China, with the development sector serving as a key battleground as Washington and its allies compete with Beijing for influence in the Global South. In 2018, the Chinese government established the China International Development Cooperation Agency, or China Aid, to streamline its foreign spending, including its Belt and Road Initiative (BRI). Although China does not publicly disclose its foreign aid budgets, a study by William & Mary’s Global Research Institute estimated that China lent $1.34 trillion to developing nations from 2000 to 2021, primarily through the BRI. The new agency was intended to enhance the effectiveness of aid as a vital foreign policy tool.
While China Aid operates differently from USAid—focusing more on loans and prominent infrastructure projects rather than collaborating with local organizations—both agencies share similar goals of expanding their respective governments’ soft power and influence. This is particularly evident in the Pacific region, where the US, Australia, and other allies are attempting to counter China’s efforts to forge security agreements with strategically important smaller nations.
Tom Wang, the executive director of People of Asia for Climate Solutions, an environmental NGO based in Manila that operates in the Philippines and China, cautioned against oversimplified narratives suggesting that China could quickly replace US soft power. Wang, whose organization does not receive funding from either the US or Chinese governments, pointed out that Chinese funders do not have the same approach.
