CNAS Insights | New Rules for U.S. Foreign Aid

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After spending a year dismantling much of the United States’ foreign aid infrastructure, President Donald Trump’s administration has recently taken steps to refashion the industry as it sees fit. In April, U.S. Representative to the United Nations Mike Waltz led the announcement of the “Trade Over Aid” initiative, which prioritizes economic development “built on free markets.” The strategy, according to Waltz, signifies an important shift from the old way of doing business and emphasizes sovereign nations’ ownership over their own economic development and trajectory.

“Trade Over Aid” is not the only way that a new U.S. aid landscape is beginning to take shape. Another essential tenet of the Trump administration’s plan for the future of foreign assistance is that development programs—in the past often driven by congressional earmarks rather than strategic priorities—will be more clearly organized around U.S. national security interests.

Here, a distinction between development and humanitarian assistance is necessary—the latter of which should remain independent of national security interests and be driven by U.S. values. Humanitarian aid responds to acute crises in a time-limited manner and, while it yields secondary benefits for American interests, should ultimately be guided by the core American value of expanding universal rights and liberties.

An internal email sent on February 12 to officials in the State Department’s Bureau of African Affairs said that a number of projects across Africa were being cancelled because “there is no strong nexus between the humanitarian response and U.S. national interests.” In a leaked cable dated April 15, U.S. Secretary of State Marco Rubio also encouraged State Department diplomats to push the idea of trade over aid to “create business opportunities for U.S. companies.” Utilizing private sector engagement to disburse foreign aid has its benefits—though policymakers should take care to not leverage humanitarian vulnerabilities for financial gain.

Moving forward, there will be greater pressure to ground spending choices for development aid in U.S. national security priorities. With rafts of competing interests, policymakers need better tools to identify the countries whose actions will have the greatest impact on U.S. national security.

One answer lies in applying a “swing states” framework to U.S. aid allocation. Countries that are influential in their region, and where the United States is competing for influence with China and Russia, should be prioritized when policymakers are developing a framework for the future of U.S. foreign aid. Doing so will help ensure that the limited resources allocated to foreign assistance—in addition to helping vulnerable countries and their citizens—align with U.S. interests.

In a growing body of work, my colleagues and I at the Center for a New American Security have identified a number of countries that meet these qualifications. In Africa, for instance, we have considered Mozambique, South Africa, Tanzania, and Nigeria, which all sit at the intersection of significant development needs and active great power competition with China and Russia. Aiding these countries would support long-term U.S. national interests by offering greater access to resources, critical minerals, and commercial deals, as well as opportunities to counter influence from Russia and China.

Indonesia, a G20 member and heavyweight in Southeast Asia, illustrates a different dimension of this framework. Though it has less need for humanitarian aid, it is a strong candidate for strategic development finance. Chinese companies now own a majority of Indonesia’s data center infrastructure—a form of digital entrenchment that shapes long-term economic and security dependencies. Development finance tools like the U.S. International Development Finance Corporation offer a direct way to compete, but only if deliberately directed toward countries like Indonesia where the stakes are highest.

It is important to note that more firmly linking foreign assistance to U.S. national interests shouldn’t mean purely transactional aid. Washington should not withhold essential health support to gain access to other countries’ resources, as it threatened to do with Zambia earlier this year. This rule does not apply to immediate disaster response, which will and should remain a core U.S. commitment. The administration adhered to this tenet when it released an initial $23 million in bilateral foreign assistance in May to support responses to an Ebola epidemic in the Democratic Republic of the Congo and Uganda—though it should be noted that the initial response was hampered by previous U.S. funding cuts in the region. To act otherwise would be not only counterproductive to U.S. interests but would contradict core U.S. values.

Instead, when applied effectively, closely binding foreign assistance and U.S. national interests can help allocate a higher proportion of limited resources where they matter the most. It is about sustained development programs that shape long-term alignments and competitive outcomes. A “swing states” framework offers a coherent way to make hard choices about which countries and issues matter most for the United States.

Gibbs McKinley is the research associate to the CEO at the Center for a New American Security.