We need some background to understand the Trump administration’s decision to halt the operations of the United States Agency for International Development (USAID) worldwide.
USAID was a Cold War project that began in 1961. Ostensibly, it aimed to assist developing nations in areas such as health, education, and social development. In the post-Cold War era, particularly after 9/11, its scope expanded to include environmental issues, gender equality, and promoting democratic institutions. While this aid was welcomed by Third World nations, which often faced economic challenges, it was also seen as a tool for political manoeuvring in recipient countries.
Pakistan was one such country, having received a substantial sum of nearly $78 billion over the past six decades.
As in other parts of the world, as in Pakistan, questions have been raised about the proper use—or misuse—of these funds by non-governmental organisations (NGOs), alongside government departments through which these funds were utilised. Concerns have been voiced about the nature of NGOs’ missions and operations, the political and ideological leanings of those in charge, and the integrity with which the money has been spent on projects. Individuals associated with these organisations have often been labelled as Western agents, accused of furthering the US agenda by emphasising certain issues, particularly those related to democracy, human rights, and gender equality. Despite such criticism and allegations, several impactful projects have been completed using these funds—examples include the construction of water reservoirs and the provision of clean water in remote areas of Pakistan.
Similar allegations are now echoing in the United States itself
Elon Musk, a close aide to Trump tasked with reducing the size and expenditure of the US government, stated on X (formerly Twitter) that USAID “has long strayed from its original mission of responsibly advancing American interests abroad, and it is now abundantly clear that significant portions of USAID funding are not aligned with the core national interests of the United States.” On another occasion, Musk concluded that “USAID is a criminal organisation. It’s time for it to die.”
Such decisions are being made solely within the White House and that the broader US establishment is either wary of or opposed to these steps
Following this, hundreds of USAID employees in the US have been placed on forced leave, while those working on contracts have been laid off immediately. They can no longer access their emails, and the organisation’s websites have ceased to function. This executive order by President Trump is effective for 90 days, after which it must be ratified by the US Congress to remain in place. As of now, the control of USAID has been placed under the US State Department.
How the world’s poorest nations benefited from USAID, and how severely they will be affected by the cessation of this funding—including Pakistan—is a separate debate. What particularly draws my attention is the nature and timing of this decision. I remain sceptical of the notion that such decisions are being made solely within the White House and that the broader US establishment is either wary of or opposed to these steps.
Here are my reasons
The Ukraine war has made the US realise one major problem, among other things: the outsourcing of heavy industries to other countries has left the US at a significant disadvantage in producing ammunition. Compared to Russia, the combined supplies of the US and its NATO allies have been far lower. This shortage of ammunition—particularly 155mm tank rounds—proved to be a major setback, as Russian forces were able to fire an impressive 10,000–15,000 rounds daily. A similar shortage of ammunition was reportedly experienced by Israeli forces during their Gaza operation. As a result, these powers have had to restrict their military actions to air raids and missile strikes. While such attacks inflict significant damage, they fall short of delivering decisive blows against large enemy forces.
This structure came into existence during the 1980s, perhaps following the design implemented by the then British Prime Minister, Margaret Thatcher, in the UK—a policy known as Thatcherism. According to this, production units were moved to the north of the country, while the affluent south controlled the business—hence dividing the country into two distinct parts. The US adopted a similar policy of outsourcing production. For example, General Motors moved its production to Mexico, Brazil and China, while its headquarters remained in Detroit, Michigan, USA. General Electric did the same in later years.
Later decades also witnessed a robust move in the US to outsource call centres to countries where English was widely spoken, as e-commerce and online business grew. This was owing to the growing wage rates in the US and other developed Western countries. In a way, it made big businesses in host countries dependent on cheap labour from developing nations. This outsourcing of production to developing nations with lower wages has created economic challenges for affluent Western countries in its own right. Asian nations, particularly China, have accumulated vast cash reserves and made the West heavily dependent on their manufacturing.
This has left few viable options for resolving the situation, other than imposing tariffs on Chinese goods—an approach that is neither ideal nor sustainable in the long run. A more strategic, long-term decision would be to rebuild domestic manufacturing strength and reduce reliance on Chinese production. However, this is a lengthy process, and in the short term, immediate measures are needed to counter China’s growing economic supremacy, particularly through its robust Belt and Road Initiative (BRI) projects around the world.
The end of USAID operations in 130 countries is not an isolated event but rather part of a larger shift in US global strategy
How can this be achieved?
Perhaps a short-term countermeasure is for the US to act as a disruptive power—a term once used by former US Secretary of State Condoleezza Rice to describe Russia after it invades Ukraine, which unsettled the US-led world order established after the Cold War in 1991. Now, it seems, the US itself may be adopting a similar policy of disruption to target BRI routes—whether through the Panama Canal, Greenland, the Middle East, Afghanistan, or the South China Sea.
A recent move by the Trump administration to offer F-35 stealth fighter jets to India points to this policy in an unmistakable way—keeping the South China Sea destabilised. How much Pakistan should be concerned about India acquiring these jets remains to be seen, as the finer details of the offer emerge in the coming days. However, it is worth recalling that when the US provided F-16 fighter jets to Pakistan, the agreement included restrictions on their use against India. The manner in which this arrangement served as leverage for the US over Pakistan offers insight into how the F-35s are likely to benefit Indian interests. Also recall the first Trump administration’s arms sales to Saudi Arabia in May 2017. The US announced a $110 billion arms deal, with potential agreements reaching $350 billion over 10 years. In other words, this was a means of extracting hard cash from the Saudis—a strategy that now appears to be repeating with India, which has accumulated over $700 billion, primarily by buying and reselling Russian oil at a discounted price following US-imposed sanctions after the Ukraine War.
That is how the US is trying to improve its balance sheet – the trade deficit. This does not sound like good news for India.
The recent moves by the US in various geopolitical directions—including the dismantling of USAID—point to a radical shift in policy that was originally formulated during the Cold War era and continued into the post-Cold War and post-9/11 eras. Therefore, I believe that analysing US foreign policy through traditional international relations theories from the Cold War period will yield inaccurate conclusions.
We must develop a new lens to understand global politics, particularly US policies, in the context of recent developments, including the annexation of Crimea by Russia in 2014, the launch of BRI projects, the digital revolution, the COVID-19 pandemic, Russia’s invasion of Ukraine, the Gaza War, and the rise of artificial intelligence (AI). Among these, the technological and economic challenge posed by China stands out as the most direct and formidable threat to US hegemony. It is within this rapidly evolving global order that the true motives behind the USAID shutdown—and other recent US actions—must be understood.
The end of USAID operations in 130 countries is not an isolated event but rather part of a larger shift in US global strategy.