There is a frenzy among recipients of US foreign aid, most notably in the Middle East, after the Trump administration decided to pause all assistance programs spearheaded by the State Department and the United States Agency for International Development (USAID) for 90 days.
President Donald Trump’s unpredictability is disconcerting for non-government and multilateral organisations in the region, as well as for other actors, but what does this decision include, what impact it will have, and what should we expect moving forward?
Trump announced the foreign aid freeze in an executive order on 20 January followed by a State Department memo on 24 January to elaborate on the details of the order. The reason for the confusion is that the executive order pausing aid does not specify the assistance programs covered in the decision, with recipients of US aid expecting the worst.
Over the weekend, the White House announced it was moving to shut down USAID as the major vehicle for foreign aid and integrate it into the State Department. The Trump administration removed two top security officials after they tried to stop representatives from billionaire Elon Musk’s Department of Government Efficiency (DOGE) from gaining access to restricted parts of the building.
Trump said on Sunday that USAID is “run by a bunch of radical lunatics, and we’re getting them out”. On 27 January, at least 56 senior career USAID staffers (mostly lawyers) were abruptly placed on administrative leave reportedly for circumventing Trump’s executive order by helping aid organisations file for waivers to continue receiving aid for life-saving projects.
However, Secretary of State Marco Rubio backtracked on the decision for a total aid freeze on 28 January, signalling in a memo that humanitarian assistance defined as “core lifesaving medicine, medical services, food, shelter, and subsistence assistance, as well as supplies and reasonable administrative costs as necessary to deliver such assistance” would be exempted, adding to the bureaucratic confusion.
The State Department said that “President Trump stated clearly that the United States is no longer going to blindly dole out money with no return for the American people”. US foreign aid was around $72 billion in 2023 targeting more than 170 countries, primarily focusing on economic assistance. US foreign aid is only 1 percent of federal spending, hence beyond the brouhaha, this is no real attempt to curb the federal debt that now has exceeded $36 trillion.
US foreign aid to the Middle East
In the FY 2024 budget, the Biden administration requested around $7.6 billion for the Middle East, of which $2 billion was for USAID, about 11% of the State Department’s International Affairs budget request.
The aid freeze does not include the Pentagon-run Foreign Military Financing (FMF), which includes military assistance to Egypt, Jordan, and Lebanon. The major recipient of FMF remains Israel, which receives $3.3 billion per year. The White House therefore excluded around $5.28 billion in FMF programs, or 70% of US aid to the Middle East, from this decision.
At stake now is the remaining 30% of paused assistance – around $2.5 billion. The State Department said it has excluded non-military aid to Israel and Egypt, which is not a significant amount as the bulk of US aid to both countries is military.
The most significant impact is on Jordanian, Lebanese, Iraqi, and Palestinian recipients of aid as well as multilateral and non-profit organisations that benefit from specific programs, most notably the United Nations Relief and Works Agency for Palestine Refugees (UNRWA).
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The US has already decreased non-military aid to Tunisia and Egypt due to democratic backsliding, but the Trump administration reportedly assured Middle East governments that aid would be resumed after the review.
Moreover, there are specific regional aid programs aimed to counter terrorism and Iranian influence as well as promoting Arab-Israeli peace. In FY 2024, the US government allocated $65 million to support human rights in Iran, $27 million for civil society in the Middle East, $8 million for reform and economic development, and $5.5 million to support Arab-Israeli technical cooperation.
Moreover, the Middle East region also receives annual humanitarian assistance not included in the region-specific budget, following the recent conflict between Hamas and Israel, and aid for humanitarian crises in Syria, Yemen, Iraq, and Lebanon; most notably the crucial assistance for Al-Hol displacement camp in northeast Syria which hosts 40,000 people, mostly women and children, displaced from areas previously controlled by the Islamic State (IS) group.
The politics of US foreign aid
The aid freeze can only be understood through the prism of domestic US politics, as it is part of a wider approach by Trump driven by his agenda. The White House simultaneously issued an executive order pausing all federal financial assistance to ensure they are consistent with Trump’s views on banning federal diversity, cutting clean energy spending, and banning abortions, among other objectives.
The White House had to rescind this executive order because of legal and policy obstacles, and there is bureaucratic and legislative pressure on the executive branch to mitigate the impact of the foreign aid freeze. The transition witnessed a bureaucratic war between the outgoing Biden administration and the incoming Trump administration, with the former making sure to secure as much funding as possible for foreign allies in anticipation of any decisions by Trump.
The State Department memo has an important milestone of 30 days to review the guidelines for all foreign aid, hence we should have a clear idea by 26 February of what to expect from the new rules under Trump. This review is led by Michael Anton, the State Department’s director of the office of policy planning, who wrote in a 2016 essay that conservatives should proactively start reshaping America away from the failures of liberals.
The State Department noted in its statement that “reviewing and realigning foreign assistance on behalf of hardworking taxpayers is not just the right thing to do, it is a moral imperative”.
Indeed, this is an extension of the ongoing culture war between liberals and conservatives. Traditionally, there has generally been bipartisan support for foreign aid, and under two previous Republican Presidents, Ronald Reagan and George W. Bush, there have been large increases. However, Trump brings a set of new philosophies and values that completely erode the tradition of US assistance, which requires an adaptation by both the US bureaucracy and aid recipients, at least for the next four years.
Secretary Rubio clearly stated in his 28 January memo that the waivers would not include “abortions, family planning conferences” and “transgender surgeries, or other nonlife saving assistance”. The White House aims to redefine US values at home and abroad regarding gender identification, abortion, and clean energy, among other issues.
Policy debate
Trump’s decision has triggered a debate about the impact of reducing US aid. In Washington, both liberals and conservatives see foreign aid as an instrument of power, but they have different interpretations of how it is defined.
For liberals, the power of aid is promoting US interests by reflecting American values, while for conservatives, and Trump specifically, it looks set to be used as a tool to reshape American values abroad and ensure that no recipient benefits if critical of, or not complying with, US interests.
Globally, and specifically in the Middle East, there is on one hand panic, as most of these entities increasingly have a narrower pool of aid providers and will have instead to explore aid from Europe and private US donors, especially liberals. Arab governments are not an ideal source of donations for non-profit organisations because they do not prioritise issues of reforms, equality, and freedom of expression, and might have their own preconditions for aid.
On the other hand, there is an argument that this is an opportunity for recipients to become more independent, to look for creative local alternatives, and diversify how they run their budget instead of relying on foreign aid. It is worth noting that beyond the issue of foreign aid, and whether one agrees with it or not, there is an acceptance and endorsement of how Trump’s conservatism is redefining American values on social issues.
Foreign aid is a matter of US leverage, a major instrument of power for US diplomatic missions, and a magnet for recipients who look for the US as a major donor. If Trump fully relinquishes this instrument, he will abdicate US leverage globally and recipients will flock to governments that have larger aid budgets such as Denmark, Norway, Sweden, and Germany.
Indeed, this move by Trump is sending a loud and clear message that US aid is no longer a synonym for liberal values and that the new administration will not accept what it sees as ‘free riding’. However, there is no reason to panic just yet. After the initial shock, a key factor that distinguishes Trump’s style, common sense might prevail within the US bureaucracy, even if there could be inevitable casualties for programs that do not reflect conservative values.
Trump is an isolationist ‘America First’ president and this expected pause in foreign aid is a notice that the world must adapt to him, not the other way around.
Joe Macaron is a researcher and analyst on US and Middle East affairs, he holds a PhD in Politics and International Studies from the University of Bath
Follow him on Twitter: @macaronjoe
