In a troubling development for international collaboration, European allies Sweden, Norway, and the Netherlands have raised concerns over millions of dollars intended for developmental aid which have been left in a state of limbo. This money, amounting to $15 million, was collectively contributed towards joint development projects by these countries and left unutilized at the U.S. Agency for International Development (USAID). This issue arises after the Trump administration and Elon Musk’s focus on reducing government expenditure led to significant cuts in USAID’s funding.
These reductions have cast doubt on whether the financial aid provided by European countries will be allocated as planned or returned. For months, officials from these nations have sought clarity on the future of these funds, yet have received no responses. This issue is particularly concerning, as emphasized by Julia Lindholm, spokeswoman for Sweden’s international development agency, who pointed out that their partner organizations deserve compensation for efforts already expended on these projects.
The gravity of this situation is highlighted by an official who chose to remain anonymous. It is suspected that other foreign governments also have financial contributions trapped in a similar manner with USAID. These actions have prompted questions regarding the financial reliability of Washington under the Trump administration, as well as adding strain to diplomatic relationships as the administration reorganizes its foreign policy.
Inquiries sent to both the State Department and USAID regarding the inactive or unrefunded funds have remained unanswered. This lack of communication has exacerbated concerns over the administration’s commitment to joint development initiatives. The partnering nations had been involved in programs such as the Water and Energy for Food (WE4F) project, which aimed to assist poorer nations in producing food efficiently while accounting for environmental constraints.
The reluctance or delay in addressing these funds impacts millions, particularly the “6 million of the poorest and most vulnerable farmers” relying on technologies supported by WE4F, as expressed by Lindholm. While other policies under President Trump have already raised alarms — such as skepticism towards the NATO mutual-defense pact and impositions of tariffs on key allies — the current financial uncertainties add another layer of instability.
The ongoing legal disputes, as observed in suits against the administration’s abrupt contract terminations, highlight the broader issue. More than 83% of USAID contracts were annulled, leading to layoffs and bankruptcies among partner organizations, further straining trust. Ex-officials including former Defense Secretaries Chuck Hagel and William Perry stated such cancellations disregard regulatory compliance, thus harming U.S credibility as a reliable partner.
The financial chaos resulting from USAID’s dismantling has also impacted banking operations traditionally supportive of agency contracts. Legal representatives from affected nonprofits revealed that usual provisions of financial support have stopped due to the prevailing uncertainties.
During this period of heightened tension, Sweden, Norway, and the Netherlands initially contacted USAID for updates on their contributions, subsequently threatening to escalate the issue through media exposure due to the non-responsiveness. A court-mandated intervention has now led to some recompense, with USAID beginning to address pending allocations and refunds.
Sweden roughly calculates a total of $12 million, including $5.1 million for WE4F, remaining unallocated from USAID, impacting multiple regions requiring aid. The Norwegian Agency for Development Cooperation also reported an absence of updates concerning a $1.4 million funding tranche. Meanwhile, the Dutch Foreign Ministry confirmed efforts to retrieve information on their $1.6 million investment.
The potential moving forward relies on exploring other avenues to ensure responsible completion of the WE4F program, as indicated by Lindholm, with donor partners considering alternate arrangements outside of the USAID framework.