USAID Shutdown: Humanitarian Crisis and Geopolitical Fallout
Alex Blackburn | 19 February 2025
Summary
Trump’s shutdown of USAID halted global US aid, sparking legal challenges and widespread criticism.
The closure has caused fears of a humanitarian crisis, disrupted NGOs and left vital projects in limbo.
China is stepping in to fill the gap, weakening US influence and trust in its foreign aid.
The sudden closure of the United States Agency for International Development (USAID) by the Trump administration has sent shockwaves across the global aid and development sector. USAID, established in 1961 by President John F. Kennedy, has long been the primary vehicle for US foreign assistance, distributing nearly USD 40 billion annually. Trump’s decision, reportedly influenced by billionaire Elon Musk and his cost-cutting initiative, the Department of Government Efficiency (Doge), has been widely criticised. Democratic lawmakers and global analysts have condemned the shutdown as illegal, unconstitutional, and damaging to US national security. Trump and Musk, both vocal critics of USAID, have accused the agency of fraud and left-wing political bias without providing evidence. The sudden freeze on USAID’s funding - accounting for 40% of global foreign aid - has halted humanitarian projects, left shipments of essential supplies to rot and locked employees out of their offices and emails.
The shutdown has already had disastrous effects. In Afghanistan, USAID-funded medical centres have closed, leaving women and children without life-saving care. In Syria, humanitarian operations at the Al-Hol displacement camp, home to 40,000 people, mostly women and children, have been suspended. Many aid programmes worldwide are in crisis, as NGOs face financial uncertainty and an inability to continue operations.
Politically, the move is seen as a self-inflicted wound that weakens US influence on the global stage. USAID has been a key tool in America’s soft power strategy, countering the rise of authoritarian influence, particularly from China and Russia. With its sudden absence, China’s state-run China Aid has already stepped in to fund at least one project in the Pacific region previously supported by USAID. China, which has long sought to expand its global influence through its Belt and Road Initiative (BRI), now has an open opportunity to fill the void left by the US.
Critics have also raised concerns about Musk’s role. As a businessman with significant interests in China, some lawmakers argue he stands to benefit from the policy shift. His inflammatory rhetoric - calling USAID a “criminal organisation” and a “radical-left psy-op” on X, has further fueled political tensions. Meanwhile, Doge’s legal authority to oversee government programmes remains unclear, with multiple lawsuits challenging its legitimacy.
The long-term damage caused by the shutdown of USAID may extend far beyond the current crisis. Countries and NGOs who once relied on US aid may seek alternative partnerships, reducing America’s diplomatic leverage. Even if the agency is reinstated, the loss of USAID’s institutional knowledge and long-standing relationships with local organisations will be difficult to recover. Perhaps the most significant consequence is the erosion of trust in US assistance. If American aid can be shut down on a political whim, future recipients may hesitate to depend on it, shifting their alliances toward more consistent partners like China. As geopolitical analysts warn, the US is not only losing its humanitarian reach but also ceding long-term geopolitical influence at a critical time in global politics.
UNICEF Ukraine/Wikimedia, CC BY 2.0
Forecast
Short-term
There will likely be an immediate impact on some humanitarian missions, previously propped up by USAID contributions; medical centres will close, food and supply shipments will be halted, and NGOs will face financial uncertainty. Additionally, there will certainly be further legal challenges from the judicial sections of government fighting over the legality of the president's moves to defund and shut down the agency.
Long-term
Even if USAID is reinstated, the US will likely suffer lasting damage to its diplomatic credibility as former aid recipients seek more stable partnerships, particularly with China. This, combined with Trump’s additional “American First” foreign and economic policies, notably tariffs, could dramatically impact America’s global influence, forcing many nations to reassess their relationship with the US.