What Has Happened to USAID?

What Has Happened to USAID?

Apr 28, 2025 | 2025 Analysis, Current Events, expert analysis, Foreign Affairs, International, National, Policy

By ANNE PITCHER 

What do the following activities, organizations, and companies have in common:

  • The Soybean Innovation Lab in Illinois
  • The delivery of food aid in Ukraine
  • The provision of antiretroviral drugs to treat HIV in South Africa
  • Neonatal care in Ghana
  • John Deere tractors, and
  • Land grant universities like Michigan State University?

All of them have benefitted from partnerships with, and/or funding from, the US Agency for International Development (USAID).  Most of them have been significantly affected by stop-work orders affecting USAID that were issued after President Donald Trump took office.

The gutting of USAID within the first 100 days of the Trump administration has upended the aid sector around the world. 

This post provides a brief overview of USAID: What does the agency do? What has happened, and what are the consequences?

So What Is USAID?

USAID was created by Congress in 1961 under President John F. Kennedy to administer humanitarian aid and programs on behalf of the US government. In recent years it has distributed some $40 billion annually in aid to 120 countries, providing support to address illness and hunger, neonatal care, clean water, electricity, and disaster relief. Among its many tasks, it promotes democracy all over Africa, conservation efforts in the Amazon, and awareness campaigns about clean air across Southeast Asia. Its spending, procurement, and project implementation procedures are subject to rigorous oversight and compliance regulations administered by the USAID Office of the Inspector General.

USAID does not give aid directly to governments. Instead, it often provides “tied aid,” meaning that the aid is conditional on recipients spending aid funding on American goods and services. For example, USAID might partner with a for-profit company like John Deere, which makes agricultural equipment, or agricultural seed companies like Corteva Agriscience, to deliver agricultural aid. USAID also provides funding to international nongovernmental organizations (NGOs) such as CARE, World Vision, Doctors Without Borders, or Catholic Relief Services, or domestic NGOs in Benin, Thailand, or Nicaragua that offer assistance in sectors from health care to education in developing countries. Some of these NGOs depend on USAID for a large percentage of their budgets. Finally USAID has partnered with US land grant universities like MSU to engage in research on water, electricity provision, or food security.

And although the much loved Peace Corps is a separate government agency it has worked closely with USAID. The Peace Corps was created in 1961 under the administration of President John F. Kennedy after he proposed it on a campaign stop at the University of Michigan when he was running for President. The Peace Corps has partnered with USAID on projects such as the Small Project Assistance Program to support community-driven projects such as the prevention of malaria or human trafficking, or disaster preparedness. Many Peace Corps volunteers often go on to serve rewarding and productive careers at USAID.

USAID

Washington, DC, USA- March 1, 2020: One of the entrance of United States Agency for International Development in Washington, DC, USA, an independent agency of the United States federal government.

What Has Happened?

On returning to office for his second and last term as President, Donald Trump signed an executive order that froze almost all international spending for a 90-day review. Cuts to foreign assistance were spelled out in detail on January 24, 2025, followed by the filing of termination and leave notices to USAID employees. In a lightning speed process,  thousands of employees had been terminated by late February. As of last month, an estimated 50,000 US citizens and twice as many foreign service nationals had lost their jobs due to cuts.  It has now been reported that many termination letters contained a number of serious errors which has affected severance pay and pension payouts for some USAID employees. 

Besides domestic workers, thousands of people were contracted from all over the world to work for USAID. Many had loyally served USAID for decades. Those employees who work for USAID on annual contracts (as many who work abroad do) cannot file for unemployment. Some have been stranded in Egypt, Mozambique, Togo, and Cambodia, without a clear path for planning or paying for a return to the U.S. of themselves, their families, and their belongings. 

With regard to USAID funds, approximately 5800 out of 6200 multi-year contracts, to the tune of $54 billion, have been cancelled. Waivers have been provided for life-saving humanitarian aid, but other requests have faced the problem that, with the dismantling of USAID, there are no staff in place to review them. Further directives issued in recent months have put exemptions on hold and another 42 of the remaining 900 contracts have been canceled. A USAID internal report notes that the stop work order was implemented so quickly that food aid was left rotting in ports and warehouses en route to its destination. Vehicles were impounded. Buildings shuttered.

After Elon Musk made a show of remedying an apparent error in DOGE’s massive cuts to foreign aid, the Trump administration quietly doubled down on its decision to stop sending emergency food to millions of children who are starving in Bangladesh, Somalia, and other countries, The Atlantic reported in April.

The Trump administration announced plans in March that USAID would come fully under that State Department and reduce its staff to about 15 positions. An email to USAID employees titled “U.S.A.I.D.’s Final Mission” detailed the plan despite lawmakers’ objections that the efforts to downsize the agency were unconstitutional. USAID employees were also ordered in March to shred and burn personnel documents.

What Are the Consequences?

Most affected by cuts to USAID include patients receiving drugs for HIV/AIDS prevention and treatment, and children in developing countries who get vaccines.  In addition, they include women in Ghana receiving neonatal care, and approximately one million Rohingya from Myanmar whose rations in a refugee camp in Bangladesh will likely be cut in half if more funds are not raised soon. They include almost half of the population of Sudan who face acute hunger.  Within weeks of the cuts to USAID, 80% of community kitchens across Sudan closed, leaving millions at risk of dying from starvation or preventable illness. Finally, they include Ukrainians receiving corn from American farmers.

Children around the world are already dying as a result of the cuts, and experts are projecting hundreds of thousands, perhaps millions of anticipated deaths in coming months and years from hunger, AIDS, and tuberculosis. Until recently, around 27 million children benefitted from nutrition programs that USAID funded; 4 million received antiretrovirals and 13 million others received treatment from the President’s Emergency Plan for AIDS Relief (PEPFAR), a health program started under President George Bush, which has now been halted.

Children in Aleppo, Syria

Now, around 1,400 infants are being infected by HIV every day, an infection rate that might have been prevented had the new US administration not cut funding to USAID and HIV/AIDS organizations. About 3 million more children and adults will die from HIV-related causes before 2030 because of global aid cuts, according to projections published in HIV Lancet. 

With respect to conflict prevention, Andrew Natsios, the former head of USAID under President George Bush, who identifies as a “conservative internationalist” has argued that there is a connection between rising food prices and conflict. He worries that without the food aid provided by USAID, we could witness an alarming rise in conflicts in developing countries that are vulnerable to spikes in food prices due to shortages or climate change. This could have demonstrable effects on our own national security and stability.

Several scholars have observed that these cuts also affect US national security by undercutting our reliance on soft power. Soft power relies on humanitarian relief, food aid, and democracy promotion that strengthens our alliances with other countries. An unintended aspect of soft power is that many of the foreign service nationals who work for USAID abroad often end up as members of parliament, heads of NGOs, or ministers in their own countries. This means the United States already has linkages and allies that serve national governments in other countries which has potential benefits for the US. Such connections will be weakened with the demise of USAID.

Finally, as we saw last month with the earthquake in Myanmar, the US retreat means our replacement by China and Russia, which ultimately undercuts our national interest and our moral standing in the world. 

This post is based on a presentation by Anne Pitcher given at the second 2025 teach-in organized by University of Michigan faculty examining “US Democracy in Peril: National and Global Implications.” The event was held March 19, 2025, in the U-M Chemistry Building. Anne Pitcher is Associate Chair of Department of Afroamerican and African Studies and Director of Graduate Studies, and is the Joel Samoff Collegiate Professor of Political Science and Afroamerican and African Studies. CPS faculty have offered ongoing expert analysis on political events of 2025. Tevah Platt of the Center for Political Studies contributed updates to this report. 

 

The American Century is Over

The American Century is Over

Apr 3, 2025 | 2025 Analysis, Economics, expert analysis, Foreign Affairs, International, National

By James D. Morrow

January 19, 2025 was the last day of the American Century. 

More precisely and less melodramatically, the liberal international order created by the United States in the aftermath of World War II is gone. 

Some would say, “Good riddance.” But my comments will focus on what has been lost with the demise of an order that sought to advance a world of democratic polities united in an open global economy. 

I am focusing on the open global economy and specifically trade because I think the change there is clear and dramatic. (Questions about the security side of the liberal international order in practice are also worth asking, but the changes there are not yet as clear.)

The ascent of the liberal international order

The goal of an open global economy formed, in part, as a response to the Great Depression where the collapse of trade between 1929 and 1933, driven in large part by tariff walls and competitive devaluations, helped make the Great Depression a worldwide event. It was achieved through the lowering of tariffs, the creation of a stable exchange rate regime, and eventually the creation of the World Trade Organization to limit non-tariff barriers to trade.

Since World War II, the global economy has grown larger and faster than any other period in history. And trade has grown faster than the world economy, making it a larger proportion of the world economy. This growth has lifted billions of people around the world out of dire poverty.

Two things to understand about international order: First, it is not a set of ironclad rules. Practical politics in some cases requires compromises with the rules, institutions, and values embedded in an international order. Second, an international order, like any political order, prioritizes some interests and values over others, so it is not neutral or equally beneficial for all.

An international order is driven by the major powers to suit their interests, but it is more sustainable when others gain from it. They have less reason to challenge that order and are more likely to operate within it.

The liberal international order advanced the interests and values of the United States for decades. But it also offered the opportunity for other countries to benefit from the open global economy through trade and investment. 

Doing so required curbing the ability of the United States to use its economic dominance to advance its particular interests at the expense of an open global economy. Multilateralism in trade, a novel feature of this order, was key. 

When the General Agreement on Tariffs and Trade (GATT) was established in the late 1940s, 23 countries came together and offered reductions in their own tariffs and committed to non-discrimination among themselves. Negotiating in a multilateral setting reduced the ability of the U.S. to use its dominant economy as bargaining leverage. 

Since then, the rounds of GATT leading to the establishment of the World Trade Organization used multilateralism and the rules and procedures of the WTO to limit the ability of large economies to flex their economic muscle to gain advantageous terms of trade.

The Cost of Tariffs

President Trump’s use of tariffs, in his first term and now, undermines both multilateralism and a rule-based order. It shifts trade negotiations back to a bilateral basis, between the U.S. and specific trading partners, and openly flouts WTO rules, instead of using those rules to justify them. 

Although it is not clear yet whether Trump will erect permanent tariff walls around the U.S. economy or merely seeks to use tariffs as a negotiating ploy, either use threatens the open global economy. 

In its place, they give him the power to use the leverage of access to the U.S. market to secure bilateral trade deals that favor the U.S. at the expense of its trading partners.

But the use of that leverage comes at the cost of alienating long-term trading partners. 

One of the great advantages that the U.S. had during the Cold War was that most industrialized countries were aligned with it and not the Soviet Union. They did so in part because they benefited from the open global economy of the liberal international order. If that order is gone, they have less reason to align with the U.S.

Canada gives us a clear example of this shift. Prime Minister Justin Trudeau announced that he would step down because his Liberal party was headed into an election this year 20 points behind the Conservatives. By the time the Liberal party selected Mark Carney as their new leader and candidate to be Prime Minister, the Liberals had eliminated the 20 point gap. They are in a close race with the Conservatives. This happened because both candidates to replace Trudeau in the party adopted anti-Trump and anti-American positions, which are now popular with Canadians who feel they are being bullied by the Trump tariffs. 

It is a sign of the cost of the demise of the liberal international order.

James D. MorrowThis expert opinion piece by James D. Morrow is based on his presentation at the second 2025 teach-in organized by University of Michigan faculty examining “US Democracy in Peril: National and Global Implications.” The independent, non-partisan event was held March 19, 2025, in the U-M Chemistry Building. Dr. Morrow’s research addresses theories of international politics, and his published work covers bargaining, the causes of war, military alliances, arms races, power transition theory, links between international trade and conflict, the role of international institutions, and domestic politics and foreign policy. Dr. Morrow is the A.F.K. Organski Collegiate Professor of World Politics  at the University of Michigan and is an affiliate of the Center for Political Studies at the Institute for Social Research. Tevah Platt of the Center for Political Studies contributed to the development of this post.