Aid & development, explained.
US President-elect Donald Trump attends the America First Policy Institute Gala held at Mar-a-Lago on 14 November 2024 (Joe Raedle/Getty Images)
Judging by track records, there's a bumpy road ahead for aid, health and climate funding.
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What a Trump second term holds for global developmentWhat a Trump second term holds for global development
Donald Trump’s return to the White House, coupled with a Republican-controlled Congress, could bring serious shifts in global development. An “America First” approach is poised to carry far-reaching implications for areas such as climate, health and broader international cooperation.
Trump allies have criticised humanitarian assistance for allegedly sustaining corrupt regimes and prolonging conflicts.
This time, Trump faces fewer political constraints. In his previous term, he cut US assistance from organisations providing abortion services (the “global gag rule”), slashed funding for UN agencies, and exited the Paris Climate Accord, and also reduced US contributions to the World Bank and the World Health Organisation (WHO). His influence over the Republican Party has solidified since, reducing the likelihood of congressional pushback, which previously mitigated Trump’s attempts to slash foreign aid budgets by up to 21 per cent. With allies such as Representative Marjorie Taylor Greene advocating for eliminating USAID funding altogether, foreign assistance could face significant reductions.
Trump allies have criticised humanitarian assistance for allegedly sustaining corrupt regimes and prolonging conflicts, suggesting that large-scale reductions to these programs could be on the table. The United States is the world’s largest bilateral donor, contributing $63 billion in official development assistance (ODA) in 2022. Big cuts or abolishment would reverberate globally, particularly in conflict zones and fragile states where US humanitarian aid is a lifeline.
An absence of the United States from multilateral aid organisations would cripple global health systems (Asian Development Bank/Flickr)
Trump favours fossil fuel development – the “liquid gold” – over renewable energy. A second term could see the United States exit the UN Framework Convention on Climate Change altogether (the United States contributes about one-fifth of the budget), undermining global climate finance initiatives and weakening international commitments to reduce emissions. Funding for climate adaptation programs in vulnerable regions, which was hit hard during Trump’s first term, risks being slashed again. This would leave nations on the front lines of the climate crisis to struggle on their own, forcing other development partners, such as Australia in the Pacific and Japan in Southeast Asia, to shoulder the burden.
Global health initiatives also hang in the balance. Trump’s first administration formally announced the US withdrawal from the WHO, only for Joe Biden to reverse the decision. Now, with Trump poised to regain power, the prospect of another withdrawal looms large. The United States contributes around 15 per cent of the WHO’s budget and is the largest donor to global health, providing $15.8 billion in health ODA in 2022. Its absence at the WHO and further cuts from health aid would cripple global health systems and pandemic preparedness efforts at a time when the world can ill afford setbacks.
The reinstatement of the global gag rule, which prohibits US family planning funding to international organisations that provide abortion services or information, would further restrict access to reproductive health services, disproportionately affecting women in low-income countries and exacerbating existing inequalities in healthcare.
As my colleague Ryan Neelam has mentioned, Trump’s return could also see a broader retreat from multilateral institutions. His previous term was marked by a withdrawal from the UN Human Rights Council and deep budget cuts to UN peacekeeping and development programs. Institutions such as the World Bank and the International Monetary Fund (IMF), long-standing pillars of the global development system and large financiers to global public goods, may face renewed scrutiny. While some Trump allies advocate for using US leverage to continue existing reform efforts, others call for withdrawing financial contributions altogether, framing these institutions as inefficient and misaligned with US interests. Such a move would destabilise multilateral efforts to address poverty and inequality, particularly in low-income countries reliant on mechanisms such as the World Bank and the IMF, at a time when global poverty reduction is stalling.
Interestingly, one area where continuity might emerge is in the push for localisation – channelling aid through locally led organisations. While localisation has been a flagship policy under Samantha Power, the current administrator of USAID, Republicans also see it as a more efficient and cost-saving measure.
Overall, the stakes of the Trump presidency for global development are enormous. The United States’ retreat from international leadership would create a power vacuum that rivals such as China are eager to fill. Beijing’s Belt and Road Initiative already positions it as a key player in global infrastructure development, particularly in regions where US aid has receded, such as Southeast Asia and the Pacific. A diminished US presence in multilateral institutions and development finance would accelerate this trend, undermining American global influence.
For Australia, positioned between two regions grappling with escalating crises – from intensifying climate emergencies to widespread humanitarian needs — the vacuum left by US leadership could be felt more than ever. Trump’s return risks undoing years of progress, leaving vulnerable communities to shoulder the burden of reduced American – and potentially multilateral – support.
The coming years will be a defining period for Australia as a development partner – one that will require innovative solutions, strategic advocacy, and a steadfast commitment to global solidarity to counterbalance the impact of America’s retreat.
About the author
Alexandre Dayant
Alexandre Dayant is a senior economist and former Deputy Director of the Indo-Pacific Development Centre, a dedicated policy research centre within the Lowy Institute.
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