The Trump administration’s unprecedented suspension of foreign aid and the dismantling of USAID – the main U.S. foreign aid agency – has thrust international development into the spotlight in recent weeks. In justifying these funding cuts, the administration argues that foreign aid must be redirected to support the national interest. During his Senate confirmation hearings, for example, Secretary of State Marco Rubio said that aid must answer three questions: ”Does it make America safer? Does it make America stronger? Does it make America more prosperous?”
Rubio’s argument is a red herring. In fact, by withdrawing previously promised aid, the Trump administration is deliberately undermining its ability to use foreign aid to pursue U.S. interests. U.S. foreign assistance has always been aligned with whatever the current administration defines as a national interest. In FY 2023, for example, $417.8 million in U.S. aid went to counterterrorism; $331.7 million went to countering the proliferation of weapons of mass destruction; and $126.5 million went to countering drug trafficking.
U.S. aid is a bargaining tool
In the countries that receive U.S. assistance, the U.S. uses foreign aid not only as a tool of soft power, but also as a bargaining tool. Foreign aid gives the U.S. government increased access to politicians in recipient countries. It allows the U.S. to ask for things in exchange for aid. This is why, in 1962, political scientist Hans Morgenthau likened foreign aid to a bribe.
However, my research with recipient governments shows that there’s a catch to effectively using aid as leverage in a negotiation. The promise of foreign aid can give donor governments access to politicians in recipient countries. But to make concessions in exchange for aid, recipients have to believe the funds will actually materialize.
Like most aid from international donors, U.S. foreign aid had a credibility problem even before the current efforts to dismantle USAID. Aid priorities often change as new administrations come in and out, and donor agencies frequently fail to uphold conditionalities attached to their aid. The U.S. has often formally conditioned their aid on good governance and respect for human rights, for example. However, contrary to government pledges, democratic and democratizing states have not historically received a larger share of U.S. aid.
The unprecedented withdrawal of U.S. aid in early 2025 shines a spotlight on these commitment problems and undermines whatever goodwill the U.S. had built up. As Moses Isooba, the executive director of the Ugandan National NGO Forum, recently told DEVEX, “All along, perhaps, we were fooled. This was not a partnership…. Now, we know that the United States is not a reliable partner.”
Using aid as a foreign policy tool
Foreign aid provides critical food aid and life-saving medicines. It prevents infectious diseases from spreading and killing American citizens. It provides literacy programs and school lunches to kids around the world. But in all of these cases, foreign aid is also a tool of foreign policy.
Even when directed towards worthy causes, aid always has larger foreign policy motivations. This is why the Financial Times called the dismantling of aid agencies the “willful sabotage of U.S. soft power.” It is why more than 200 former U.S. government officials – Republicans and Democrats alike – signed a letter imploring Senators John Thune (R-S.D.) and Chuck Schumer (D.-N.Y.) and Representatives Mike Johnson (R-La.) and Hakeem Jefferies (D-N.Y.) to “take all steps in your power to urge rescission of the Trump administration executive orders and directives aimed at freezing U.S. foreign assistance and dismantling USAID.”
Foreign aid is more than soft power, however. Aid is also bargaining power, modeled by the game theorist John Nash as the relative ability to exert influence over a situation to achieve favorable terms. In countries worldwide, the U.S. uses foreign aid to leverage for things the U.S. government wants. That includes things like good governance and human rights, but also things vital to U.S. economic and security interests, like favorable trade terms.
Providing foreign aid helps earn the favor of the recipient government – and leaders and institutions at both the local and national levels. It also facilitates access to people in charge of key areas. In a meeting about U.S. support for the health or education sectors, U.S. policymakers might also raise key strategic foreign policy goals with senior government officials, for example. In countries around the world, aid facilitates conversations that are vital to U.S. interests.
Consider U.S. aid to Kenya
A closer look at U.S. aid to Kenya offers some insights. The United States has historically been Kenya’s largest development partner in terms of gross bilateral foreign aid flows. From 2010 to 2018, about 60% of U.S. bilateral aid went to the health sector. The U.S. is also one of the top three destinations for Kenya’s exports and the seventh largest source of its imports. This State Department’s Kenya webpages focus on three things: the history of diplomatic relations, the bilateral economic relationship, and U.S. foreign assistance to Kenya. U.S. foreign aid to Kenya enables the U.S. to lobby more successfully for the other things it wants – whether it’s votes in the U.N. General Assembly or market access for U.S. companies.
The influence of U.S. aid is also why some Global South voices are suggesting that the dismantling of USAID is an opportunity to move away from a system of aid dependence and U.S. hegemony. Nayib Bukele, president of El Salvador, for example, welcomed the shuttering of USAID on X. Bukele said, “it’s a big win for the rest of the world.” Even amongst more moderate voices, the decline of U.S. aid is being depicted by some as a way to define a new order.
Aid is a tool of foreign policy that the United States – and other donors – use to get what they want. As the world’s largest donor (until recently), the United States has used its foreign aid, rightly or wrongly, to pursue its interests abroad.
Withdrawing aid undermines U.S. credibility
Importantly, however, aid bargaining takes place over repeated interactions and, in these negotiations, recipients have power. They can remove the donor from the country, as Rwanda did with France in the 2000s – or Tanzania did with the International Monetary Fund in the late 1970s. They can also simply not deliver on whatever they promised to do in exchange for aid donors. In this way, aid relationships are more akin to a partnership built up over time and across repeated interactions.
In my conversations with recipient governments throughout Africa for my book, The Development Dance: How Donors and Recipients Negotiate the Delivery of Foreign Aid, I heard one thing over and over: The biggest frustration for recipient governments was that donors could not deliver on their promises. Aid was promised under certain conditions – but not delivered as promised because priorities changed or donors shifted the goalposts.
I also heard that China was much better at keeping its promises. Recipient countries saw less bureaucratic red tape with Chinese aid – and perceived this aid as being more likely to materialize. If aid was promised, it arrived, and quickly. For cash-strapped governments, the knowledge that aid will be delivered is a powerful incentive – even if it comes with other costs, such as higher interest rates.
During his 2024 campaign, Trump promised to be tough on China. But the withdrawal of foreign aid undermines the U.S. ability to compete with China, at least when it comes to foreign aid. In many countries, Chinese assistance is already highly valued because it tends to fund the productive sector. And in contrast to aid from the U.S. and other traditional donors, who tend to fund things like health and education, China tends to fund things like roads and infrastructure.
In practice, most cash-strapped governments need both types of aid. So most governments would happily accept aid from both China and the United States. However, by shuttering USAID and canceling more than $27 million in U.S. foreign aid, the Trump administration is taking itself out of the game. Not only has this move allowed China to assume first place when it comes to global bilateral aid flows, it has also provided an opportunity for China to characterize itself as a reliable “friend” who refuses to play great power politics with aid. While the latter is undoubtedly far from true, it is an effective narrative and a core part of the way China exercises power.
The decision to withdraw from existing aid contracts undermines the U.S. ability to use aid to ask for things that it wants. In the words of political scientist Sarah Bermeo, the freeze on foreign aid by the Trump administration is a “spectacular display of weakness masquerading as strength.” In contrast to the narrative of “America First,” the unprecedented withdrawal of aid commitments by the Trump administration is the willful sacrifice of U.S. bargaining power. If recipient governments don’t see the United States as a credible partner, why would they do what the U.S. is asking them to do in the future?
Haley J. Swedlund is an associate professor in the Department of Political Science at Radboud University in the Netherlands, and the author of The Development Dance: How Donors and Recipients Negotiate the Delivery of Foreign Aid (Cornell University Press, 2017).
