The erosion of American soft power

President Donald Trump’s decision to pause all American foreign aid by issuing a three month ‘stop work’ order to the United States Agency for International Development (USAID) is a move which has led to an immediate disruption in ongoing humanitarian and development initiatives around the world.

USAID was created in the early 1960s, when the US was increasingly locked in a battle with the Soviets for winning ‘hearts and minds’ around the world during the Cold War. USAID began pouring in money into strategic states like Pakistan and Egypt, and into many other resource-constrained countries, to woo them to the American side.

USAID has continued to operate in many poorer countries around the world long after the Soviet Union crumbled. USAID has also expanded its mandate over time. Besides providing lifesaving medicines, education, food and clean water to people in need, USAID promotes women’s empowerment and governance reforms, and supports economic policies which align with American interests. USAID-funded projects do not always deliver positive outcomes, of course. Consider how American support to usher in a ‘Green Revolution’ across the global south boosted agricultural productivity but did so by triggering massive rural displacements, and by causing immense ecological problems.

However, it is undeniable that this entity has served well in terms of enticing the leaders of many struggling countries to align themselves with US strategic interests. The current move by President Trump to pause USAID work is meant to enable his administration to assess which USAID projects are serving vital American interests, as defined by Trump’s own team. Thus, the current USAID crisis is part of Trump’s broader vision to downsize government institutions, in the supposed bid to make them more efficient.

While both the Democrats and Republicans have long used rhetoric like promoting democratic values and alleviating poverty to funnel money overseas to gain greater international leverage, President Trump has deemed such efforts as being wasteful. He now wants to ‘put America first’ and have an explicitly transactional relationship with the rest of the world. Even during his first term, Trump reduced foreign aid spending by suspending payments to various UN agencies, and to the Palestinian Authority. This time around, however, Trump has targeted USAID directly.

The current Secretary of State has issued a temporary waiver for emergency food assistance to places in desperate need such as Gaza. However, food assistance is a very small proportion of the work supported by USAID. During the current review process, all sorts of other vital development efforts being funded by USAID have come to a grinding halt.

There is immense disgruntlement amongst American government employees at present, as well as amongst the thousands of development professionals who work on USAID projects. There will invariably be internal challenges to Trump’s efforts to either disband or revamp USAID, or to even subsume parts of it into the State Department itself. Nonetheless, as things stand, the international development sector has suffered a major blow.

The US, to date, has been the largest international aid provider. In the fiscal year 2023, the US disbursed over $70 billion in aid, including money given to multilateral agencies like the World Bank, the UN system, and a range of other development actors. USAID itself received $40 billion during the same year, according to Congressional Research Service. Despite being the largest provider of aid, due to the overall size of its economy, this assistance still makes up less than 1% of the US government’s budget. The US spends much more money on maintaining its coercive power, and on providing military aid to its allies. Yet, President Trump wants to take away this effective tool for the exercise of American soft power. Invariably, countries dependent on US aid will now look elsewhere, and other powerful countries, especially China, will get an opportunity to further displace America’s global influence.