WASHINGTON — President Donald Trump’s limitations on foreign aid and his focus on a significant agency responsible for international programs could be providing an advantage to one of America’s main rivals, China.
The administration’s approach, characterized by a series of “America First” actions, such as stepping away from the U.S. Agency for International Development (USAID) and withdrawing from international alliances, has prompted concern among certain lawmakers and analysts. They fret that these decisions may lead to the U.S. losing its global influence, particularly in light of growing apprehensions about China’s expanding presence and its impact on American interests.
U.S. foreign aid has historically represented a form of “soft power,” enabling the United States to foster goodwill, establish partnerships, and counteract adversarial influences. This strategy allows America to enhance national security without resorting to military interventions or other aggressive tactics.
In Cambodia, the differences are stark; China is providing $4.4 million for demining initiatives, while the Trump administration has halted a $6.3 million State Department grant designed to remove unexploded ordnance left over from past conflicts. Officials from the administration assert that it’s time to reassess how the U.S. allocates its overseas financial resources.
When questioned about whether America’s withdrawal from foreign aid initiatives could facilitate greater global dominance for countries like China and Russia, national security adviser Mike Waltz rebuffed the idea. He stated in a recent appearance on NBC’s “Meet the Press” that these foreign missions often do not align with crucial U.S. strategic interests, especially in relation to countering China.
In another development, the Trump administration successfully urged Panama to abandon its participation in the Belt and Road Initiative, which is China’s flagship initiative for international development, but this move drew criticism from Beijing.
The implications of the U.S. reducing its foreign aid are the subject of considerable debate among experts and lawmakers. Legal challenges are underway against the administration’s pause on foreign assistance and its actions against USAID, with some efforts currently on hold.
Feng Zhang, a visiting scholar at Yale Law School’s Paul Tsai China Center, expressed concern, remarking that the current developments under a second Trump administration would significantly aid China’s attempts to extend its global influence. Senator Andy Kim, a New Jersey Democrat, echoed these sentiments, saying that China is now in a strong position to gain influence without much competition due to U.S. policy shifts.
Meanwhile, Representative John Moolenaar, a Michigan Republican and chair of the House Select Committee on the Chinese Communist Party, stated it may be time to reconsider foreign assistance strategies. He expressed interest in uncovering what strategies have been effective in the past and how to innovate the approach to better reflect American values and interests.
Dennis Wilder, a senior fellow at Georgetown University’s Initiative for U.S.-China Dialogue on Global Issues, emphasized that global influence is multifaceted and the U.S. still possesses the world’s strongest military and its dollar remains the dominant currency in the global financial system. He cautioned against assuming that China can seamlessly fill any gaps left by the U.S.
The Chinese embassy in Washington conveyed that Beijing is open to collaborating with various nations, including the U.S., to enhance cooperation in development sectors, thereby promoting shared prosperity.
The competition for foreign aid between the U.S. and China involves differing approaches to how funds are allocated. Chinese foreign assistance frequently comes in the form of loans tied to infrastructure and energy projects, whereas U.S. financing has predominantly been granted as low or no-interest loans and philanthropic aid, often aimed at public health and humanitarian projects.
For example, in Peru, China’s investment has been crucial in constructing a significant $1.3 billion megaport, which debuted during a visit from Chinese President Xi Jinping. Conversely, U.S. funds in Peru have been directed towards developing coffee and cacao industries as alternatives to illicit cocaine agriculture.
In various regions, American financial contributions have been instrumental in combating HIV/AIDS in Africa, treating malnourished children in South Sudan, and offering medical assistance to immigrants in Mexico. In recognition of the need for the U.S. to engage in tangible foreign projects, Congress established a fund in 2018 to merge government funding with private resources for initiatives, including the trans-Africa rail project in Angola.
From 2000 to 2021, China invested approximately $1.34 trillion in nearly 18,000 development projects, according to AidData, while the U.S. allocated around $1.24 trillion in foreign assistance, including military aid, from 2001 to 2023. Notably, USAID, which emerged during the Cold War to counter Soviet influence, is the largest U.S. governmental entity in foreign aid, distributing $43.8 billion in 2023—an amount that accounts for less than 1% of total annual U.S. government expenditure.
There is a potential risk that U.S. disengagement could diminish its goodwill abroad. The disparity in project types funded may mean that China could struggle to fill the void left by the U.S. However, the absence of American engagement still allows China to capitalize on fostering relationships and goodwill, as highlighted by Samantha Custer, policy analysis director at AidData.
“Countries observe how the U.S. interacts with its partners, and they start questioning the reliability of the U.S. as an economic and security ally,” Custer explained. This observation could further reinforce Beijing’s image as a responsible partner, creating doubts about U.S. commitment.
Additionally, organizations like China Labor Watch depend heavily on U.S. funding, which has suffered due to the current aid freeze, prompting layoffs and furloughs among U.S.-based staff, as stated by founder Li Qiang.
China is now positioning itself as the alternative for nations in search of investments without political conditions, as noted by Salvador Santino Regilme, an associate professor at Leiden University. He warned that the U.S. aid freeze suggests a shift back towards militarized diplomacy, thereby sidelining soft power in favor of harder coercive measures.
