The future of the United States Agency for International Development (USAID), the US government’s leading overseas aid agency, is in limbo amid Trump’s administration’s plans to merge it with the US Department of State. The agency said that exceptions would be made for “mission-critical functions, core leadership, and specially designated programs,” but what that includes remains unclear.
On Monday, Secretary of State Marco Rubio accused USAID’s leadership of “insubordination” and announced that he was now the agency’s acting head. The move to shut down the agency is having a profound impact on humanitarian programs around the world.
Why USAID is under threat
The United States Agency for International Development (USAID) was established in the early 1960s to administer humanitarian aid programs on behalf of the US government. According to the Congressional Research Service, USAID employs around 10,000 people, two-thirds working overseas.
It is based in over 60 countries and works in dozens of others. However, most of the work on the ground is carried out by other organizations contracted and funded by USAID.
USAID undertakes a wide range of activities, it provides food in countries where people are starving and operates the world’s gold-standard famine detection system, which uses data analysis to predict where food shortages are emerging. USAID’s budget is mainly spent on health programs, which include offering polio vaccinations in countries where the disease still circulates and helping to stop the spread of viruses that can potentially cause a pandemic.
The BBC’s international charity, BBC Media Action, is funded by external grants and voluntary contributions. It receives funding from USAID, and according to a 2024 report, USAID donated $3.23m (£2.6m), making it the charity’s second-largest donor that financial year.
The US spent $68bn (£55bn) on international aid in 2023 across several departments and agencies. Still, USAID’s budget, at around $40 bn, constitutes more than half of it, or about 0.6% of the total US annual government spending of $6.75tn, according to government data.
Most USAID money is spent in Asia, sub-Saharan Africa and Europe, primarily on humanitarian efforts in Ukraine, the US is the world’s biggest spender on international development, while the UK is the world’s fourth-largest aid spender. In 2023, it spent £15.3bn, around a quarter of what the US provided.
Legal hurdles ahead
Trump has been a long-term critic of overseas spending and has said it does not represent value for money for American taxpayers. He has singled out USAID for extreme criticism, describing senior officials there as “radical lunatics”.
The White House on Monday published a list of USAID projects that it said were evidence of “waste and abuse,” including a $1.5m grant to an LGBTQ group in Serbia, $2.5m for electric vehicles in Vietnam, and $6m for tourism in Egypt. However, the press release for that project, issued in 2019 during the first Trump administration, listed aid projects, including water, education, and transportation for the North Sinai region.
After returning to office, one of Trump’s first actions was signing an executive order that paused almost all international spending for 90 days while a review could occur. An example is the  President of Catholic Charities USA urging the Trump administration to “rethink” its pause on federal funding for grants and loans to nongovernmental organizations (NGOs), noting the “millions of Americans who rely on this life-giving support.”Â
In like manner, nearly all global health funding from the US has been halted immediately by the Trump administration, which includes PEPFAR, the widely praised program created by President George W. Bush in 2003 to prevent HIV/AIDS.
Waivers were later issued for humanitarian programs, but the announcement upturned the world of international development and caused widespread disruption to services. Programs that provided medication to the world’s poorest and installed clean water supplies had to stop overnight, one veteran humanitarian worker said the pause was “like an earthquake across the aid sector”.
Tensions between the White House and USAID intensified over the weekend when officials working for Elon Musk, whom Trump has saddled with the responsibility of identifying spending cuts in the federal budget, were reportedly denied access to secure financial data at USAID headquarters.Â
“Regarding the USAID stuff, I went over it with the president in detail, and he agreed that we should shut it down, ” Musk said on Monday in a public conversation on X.
USAID’s website has gone offline, and employees were told to stay at home on Monday. Later on Monday, Marco Rubio, the Secretary of State, said that the agency would continue to perform ” many functions” but that spending “has to be in alignment with the national interest.”
Cancelling USAID would likely garner popular support, opinion polls have long suggested that American voters favour slashing foreign aid spending. According to the Chicago Council on Global Affairs, polling data from the 1970s have indicated broad support for cuts.
While the White House wields significant influence over USAID, that power is theoretically limited, USAID was established after Congress passed the Foreign Assistance Act in 1961, which authorized the establishment of a government agency responsible for overseas spending administration. Shortly after, then-President John F. Kennedy established USAID through an executive order. In 1998, another law was passed confirming USAID’s status as an executive agency.
In short, that means Trump cannot simply abolish USAID by signing an executive order, and any attempt to do so would undoubtedly face strong opposition in the courts and Congress. Closing USAID altogether would likely require an act of Congress, where Trump’s Republican Party holds slim majorities in both houses.Â
One option reportedly being considered by the Trump administration is effectively making USAID a branch of the State Department rather than a government agency in its own right. This type of reform is not new because, in 2020, UK Prime Minister Boris Johnson merged the Department for International Development with the Foreign Office.
Ministers said it would ensure international spending supported the government’s broader foreign policy goals. Still, critics warned it would reduce expertise in the aid sector and damage the UK’s overseas standing and influence.
Implication of USAID’s closure
Given the amount of funding from the US, any changes to how that money is spent will doubtless be felt worldwide. USAID’s activities range from providing prosthetic limbs to soldiers injured in Ukraine to clearing landmines and containing the spread of Ebola in Africa.
After the 90-day overseas spending freeze was announced, Rubio said “every dollar” must be “justified” by evidence that it makes the US safer, stronger, and more prosperous. Democratic Party politicians have called the moves illegal and have said they would jeopardize national security, citing reports that correctional officers in Syria, who were charged with securing thousands of Islamic State fighters, nearly walked off the job when US funding was temporarily cut off.
Trump has clarified that he wants overseas spending closely aligned with his “America First” approach, and the international development sector is braced for more shockwaves. There are also questions about how much the US will spend overseas in years to come, as Musk, empowered by Trump, attempts to cut billions from the government’s budget.
While the proposed merging of USAID with the US Department of State is still in view with other reforms by the Trump administration, the United States seeks to bolster its economic streams aimed at promoting its economic growth and national security.Â