The pausing of USAID, which has been targeted by President Donald Trump‘s ally Elon Musk, could see China and Russia could step in to exert their geopolitical muscle.
The halting of the U.S. development program has prompted speculation that China could fill the vacuum through its Belt and Road Initiative (BRI), Beijing’s massive infrastructure investment strategy across the world, including countries where USAID operates.
One China expert told Newsweek that the USAID funding freeze had handed an “enormous gift” to Beijing’s push to influence the Global South.
Meanwhile, one Kremlin propagandist has said on Russian television that Moscow could exploit the gap left by USAID and project geopolitical power with a similar program.
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Why It Matters
Apart from upending the future of U.S. development projects across 100 countries, the pausing of USAID could force developing countries to turn American rivals and adversaries for humanitarian help, lessening Washington’s global influence.
What To Know
In 2023, USAID provided financial help to around 130 countries in a program that sought to combat problems such as diseases and famine. But Tesla and X owner, Elon Musk, the billionaire adviser to Trump, has targeted USAID, which has 10,000 staff and a budget of around $40 billion, as part of the administration’s push to slash federal spending.
Musk, head of Trump’s Department of Government Efficiency (DOGE), said Trump had agreed to shut USAID down.
Could China Move In?
Former U.S. Ambassador to Russia Michael McFaul said China’s Communist Party (CCP) BRI is used for global leverage and, by trying to shut down USAID, Musk and Trump are handing Chinese President Xi Jinping “a giant gift.”
Highlighting the link between the BRI and Beijing’s quest for geopolitical influence was Panama’s decision to step away from the BRI, following a visit to the country from Secretary of State Marco Rubio.
Panama, at the center of Trump rhetoric over controlling the Panama Canal, is the first Latin American nation to leave the initiative in what is a win for Washington.
Steve Tsang, director of SOAS University of London’s China Institute, told Newsweek on Wednesday that Trump is “trashing U.S. credibility in the Global South” and the USAID pause is “one of the moves he has made to make China great again—a goal set by (President) Xi Jinping.”
As such, China’s BRI and wider engagement with the Global South will come across as more reliable and valuable. It is questionable if President Trump understands all the implications of his order, Tsang added.
However, he said that, while Trump’s approach to USAID offers an “enormous gift” to Beijing, China is unlikely to fill the gap left by the suspension of U.S. aid because the BRI is primarily a development assistance program via commercial loans whereas the USAID comes with conditionalities.
Funding for the BRI has been scaled back, and Beijing is paying more attention to the viability of new loan projects, which means there is not much scope for it to replace American aid, even in countries targeted for the BRI, Tsang added.
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Impact on Ukraine—and Russia
The halt to USAID has already impacted Ukraine, which at $16 billion was the top recipient of the program in 2023. The funds were essential in helping the country deal with the humanitarian crisis caused by Vladimir Putin‘s full-scale invasion.
Yuriy Boyechko, founder of Hope for Ukraine, a humanitarian group working in the war-torn country, told Newsweek that the USAID freeze had raised severe concerns among humanitarian groups about the continuation of lifesaving programs.
In response to the pause, Boyechko said his organization would triple its weekly firewood deliveries, increase food kit distributions, and initiate its solar-energy resilience program to help people deal with the harsh winter.
But, away from helping Ukrainians cope with the war, pausing USAID could also help Russia in other ways, according to the Kremlin propagandist Henry Sardaryan.
In comments reported by Russia watcher Julia Davis, Sardaryan, dean at the school of Governance and Politics at the Moscow State Institute of International Relations, told the Russia 1 channel how much Moscow has welcomed the demise of USAID.
Sardaryan said that Russia should create a domestic equivalent of the program, which could serve as a tool to exercise influence over the countries that would benefit from Moscow’s aid.
What People Are Saying
Steve Tsang, director of London’s China Institute, told Newsweek: “With Trump trashing U.S. credibility in the Global South by the suspension of U.S. overseas development aid, China’s BRI and wider engagement with the Global South will come across as more reliable, credible and valuable.
“Trump’s approach to USAID is just one of the moves he has made to make China great again, a goal set by Xi Jinping.”
Henry Sardaryan, from Moscow State Institute of International Relations, said: “Foreign assistance should be part of our foreign policy—as opposed to charitable giving … it could be a phenomenal lever.”
Yuriy Boyechko, founder of Hope for Ukraine, told Newsweek: “The ongoing 90-day audit of USAID funds has raised severe concerns among humanitarian groups about the continuation of lifesaving programs.”
What Happens Next
USAID announced on its website that its staff will be placed on leave Friday night and all overseas missions for USAID have been ordered to shut down, CBS News reported.
But the program is unlikely to disappear without a fight because, while Trump can drastically curtail USAID with executive actions, he “may not unilaterally override” a statute by executive order, according to the online forum Just Security.
