According to experts, cutting foreign aid will certainly weaken Washington's diplomatic capacity and have an immediate impact on US-China relations, creating an advantageous position for Beijing.
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| Will reforming the federal government really help the US focus more resources on competing with China - a top priority of President Donald Trump? (Source: SCMP) |
For six decades, the U.S. Agency for International Development (USAID) has been Washington’s soft power tool. It manages billions of dollars in financial aid distributed around the world—some $71.9 billion, or more than 40 percent of global humanitarian aid, in 2023 alone. Through USAID programs in 177 countries, U.S. export markets have also expanded.
Great powers like China have followed suit by establishing similar agencies to carry out their own soft power initiatives.
But after Donald Trump began his second term with a shock move to close USAID and freeze most foreign aid for a 90-day review, Washington's efforts to increase its soft power came to an abrupt halt.
Undermining Washington's soft power
The dissolution of USAID is part of a broader restructuring aimed at streamlining the government and aligning the agency’s spending with the administration’s priorities. According to reports, USAID will continue to function as an aid agency, but will see significant cuts in funding and staff.
The move has caused widespread job losses, with 1 million civil servants asked to resign or facing layoffs, while leading research agencies such as the National Institutes of Health and the National Science Foundation have been asked to review grants and cut staff.
By withdrawing the US from the Paris Agreement on his first day in office, President Donald Trump officially left the world’s largest emitter outside global efforts to combat climate change. His decision to withdraw the US from the World Health Organization (WHO), which Mr. Trump has repeatedly criticized for its handling of the Covid-19 pandemic, was also seen as inconsistent with the country’s priorities.
Analysts say the abrupt end to foreign aid and policy turmoil in Washington could weaken America's soft power and global standing, while creating opportunities for China to expand its influence.
However, some experts say that reforming the federal government could allow the US to focus more resources on competing with China - a top priority of the Trump administration.
The foreign aid freeze and the elimination of USAID are notably consistent with proposals laid out in Project 2025 — a “far-right agenda” for Mr Trump’s second term in the White House compiled by the right-wing think tank Heritage Foundation in 2023.
Accordingly, Project 2025 calls on the new administration to take “bold steps” on “day one” to “reshape the scope and purpose of USAID’s humanitarian assistance portfolio” to better counter Beijing.
“The overall aim of this reform is to reduce waste and improve efficiency, and there is no doubt that Beijing will definitely be a priority in reallocating Washington’s diplomatic and security resources in the future,” said Wu Xinbo, dean of the Institute of International Studies at Fudan University in Shanghai.
According to Mr. Wu, while the US President and his supporters claim that the goal is to minimize waste of resources, “on the other hand, these resources are likely to be redirected to the area of competition with China.”
Foreign aid has long been considered a cornerstone of “soft power” – a term first coined by political scientist Joseph Nye in 1990 to define the ability of a country to influence another without coercion. Unlike “hard power” – which uses military and economic means – soft power is not only favored by states but is also exercised through non-governmental organizations and other international organizations.
Since President Trump signed an executive order suspending foreign aid for 90 days on January 20, analysts have worried that the world's number one power could lose its position on the international stage as rival powers such as China and Russia try to fill the void.
In an interview with NBC News, Joseph Nye said he believes the White House boss doesn't understand anything about soft power.
| “Power is the ability to get others to do what you want, and you can do it in three ways: coercion; money; or attraction – the stick, the carrot, and the honey. And President Trump doesn’t understand honey,” the father of soft power emphasized. |
US Secretary of State Marco Rubio, who was appointed as acting administrator of USAID, sought to allay concerns about the agency's future, promising to maintain programs related to "health care, food, shelter and livelihood support".
During his first foreign trip since taking office, Mr. Rubio told embassy staff in Guatemala that the United States “will not abandon foreign aid,” according to The New York Times .
Billionaire Elon Musk, a senior adviser to President Donald Trump and head of the Department of Government Efficiency (DOGE), has outlined plans to shut down more federal agencies, including the Department of Education. A series of lawsuits have been filed in response to the move by unions and a group of Democratic state attorneys general.
Around the world, countries, including US allies, are also closely watching the dramatic policy shifts taking place in Washington and analyzing the potential impact. Philippine Foreign Secretary Enrique Manalo said last week that he would “seek to clarify exactly what will be affected” when he meets with Secretary of State Marco Rubio on the sidelines of the Munich Security Conference.
According to Manila-based news portal GMA Network , USAID has supported 39 organizations and projects in the Philippines with financial assistance amounting to $47 million.
Giving Beijing an advantage
Li Wei, a professor of international relations at Renmin University in Beijing, said that while Republicans and conservatives have long called for cuts to the federal bureaucracy, it was surprising that Mr. Trump had first targeted USAID, an agency that has been around for more than 60 years.
“Overall, aid has long been an important tool of foreign policy,” Li said. “Cutting back foreign aid will inevitably weaken Washington’s diplomatic capabilities and have an immediate impact on US-China relations, playing into Beijing’s hands.”
Currently, the world's second largest economy remains silent about the US government's move to dissolve USAID.
Still, at a press conference last week, officials from the China International Development Cooperation Agency — set up in 2018 to manage the distribution of foreign aid — sought to portray the Northeast Asian country as a stable partner for developing countries at a time of uncertainty in Washington.
“China always fulfills what we commit to and keeps our promises,” Hu Zhangliang, deputy director of the China International Development Cooperation Agency, said in an interview with Phoenix TV , adding that Beijing will provide aid “to the best of its ability” to developing countries.
US National Security Adviser Mike Waltz has dismissed the idea that eliminating USAID would create opportunities for China and Russia, saying the agency has not acted in America’s strategic interests, “like pushing back against Beijing.”
America wants to "wholeheartedly" compete with China
Dealing with Beijing is clearly a priority for President Trump and his aides, said Wu Xinbo, an expert. Both Rubio and Waltz have previously called on the president to quickly end the conflict in Ukraine so that the US can “wholeheartedly” compete with China.
Just hours after being sworn in, Secretary of State Marco Rubio met with his counterparts from Japan, Australia and India in the first meeting of the Quad group after the new US administration with the aim of countering China's influence in the Indo-Pacific region.
Professor Li Wei commented that it is still too early to say how this “unprecedented” federal government reform will change the dynamics between Beijing and Washington.
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| With President Trump shutting down USAID and freezing most foreign aid for a 90-day review, Washington's efforts to increase its soft power have come to an abrupt halt. (Source: TNS) |
“If successful, reforms could restore domestic markets by cutting government agencies and excess spending, and that would make the US more competitive and bring about new changes in the balance of power with China.”
Meanwhile, observers in the US say the reform process will not bring the desired effect. “If the main target is China, then maybe ... this will be counterproductive,” said Zhiqun Zhu, Associate Professor of Political Science and International Relations at Bucknell University in Pennsylvania.
“For example, if China were not a member of the WHO now, it would be difficult for the US to exercise its influence in this global organization, let alone put an American in a leadership position,” Zhiqun Zhu cited, referring to the information that the Trump administration is considering a plan to reform the WHO, including putting an American at the head of this multilateral organization.
Even if USAID were merged with the State Department, as proposed by Secretary Rubio, “there would still be closer oversight because administrative expertise and organizational missions are not easily interchangeable,” said Andrew Mertha, director of the China Studies Program at the School of Advanced International Studies at Johns Hopkins University in Washington, D.C.
Mr. Trump’s other unilateral actions and provocative ideas will also erode America’s soft power, according to Mr. Mertha — including taking control of Greenland, Canada and the Panama Canal, imposing tariffs on allies and competitors, and his overtures to Russian President Vladimir Putin.
The official asserted that with President Trump dismantling USAID, as well as other unilateral efforts to reposition the United States in the global order, this will quickly drain international goodwill, leaving voids that China can easily fill.
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