The US is the world’s largest aid donor, with more than half of it administered through USAID and used to fund health services, disaster relief and anti-poverty efforts around the world. Even a hastily compiled exemption for lifesaving humanitarian assistance programs failed to avert the chaos, as programs laid off staff and shut down services.
The agency is now in the crosshairs of Trump’s government efficiency chief, Elon Musk.
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“USAID is a criminal organisation. Time for it to die,” the billionaire posted on his social media platform, X, on Sunday (Monday AEDT).
Senior USAID staff have been put on leave after trying to block Musk’s so-called Department of Government Efficiency from accessing the agency’s classified material at the weekend. The USAID website went offline on Saturday and remains down.
As Democrat senator Chris Murphy, a member of the Senate foreign relations committee, put it on X, the immediate consequences would be “cataclysmic”.
“Malnourished babies who depend on US aid will die. Anti-terrorism programs will shut down and our most deadly enemies will get stronger … And China will fill the void,” he wrote.
President Donald Trump has imposed tariffs on Canadian, Mexican and Chinese goods.Credit: AP
The potential collapse of USAID won’t be disastrous in the Pacific because funding through the agency was minimal, says the Lowy Institute’s Alexandre Dayant, who has tracked aid flows across the region.
But it may mean Australia is left to do more of the heavy lifting. This will certainly be the case with climate change, an existential issue for low-lying Pacific countries, after Trump’s decision to pull the US out of the Paris climate agreement.
China has already displaced the US to become the second-biggest donor in the Pacific, though its contribution was still less than a quarter of Australia’s $18.8 billion in 2022, the latest available figures crunched by Lowy’s Pacific Aid Map tracker.
For now, the bulk of the US’s roughly $3.4 billion in funding is concentrated on three Pacific island nations – Micronesia, Marshall Islands and Palau – and is delivered outside of USAID programs through agreements that run to 2043. Marshall Islands and Palau recognise Taiwan, not China, as a diplomatic partner.
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“China is trying very hard to convince the nations that are supporting Taiwan to do a diplomatic switch and support China instead,” Dayant says.
Foreign investment and aid have been Beijing’s key tools in peeling away support for Taiwan, with Nauru switching to Beijing last year and Solomon Islands and Kiribati in 2019.
When Prime Minister Anthony Albanese was caught on a hot mic in Tonga last year joking with a senior Biden administration official about going “halvies” in Australia’s landmark $400 million Pacific Policing Initiative, it was an unedifying moment, conjuring the spectre of two allies collaborating as backroom puppet masters, not aid partners.
But it showed the US and Australia were deeply entwined in their thinking on the national security threat posed by China’s advances in the region and the need to counter it.
With US Secretary of State Marco Rubio, a China hawk and vocal supporter of Taiwan, overseeing the foreign aid review, there is strong reason to believe that the US strategy in the Pacific won’t change. But Trump is anything but predictable.
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