The Trump administration is seeking to encourage other nations to cut back on global humanitarian aid and 'promote America First values' by investing in US companies, multiple reports indicate. A cable sent to all American embassies and consulates states the 'trade over aid' initiative will be an opportunity to use the United Nations system to 'create business opportunities for US companies'. This approach reflects long-standing criticisms from President Donald Trump and his allies, including Elon Musk, who have argued that traditional aid models are rife with waste, fraud and abuse.
The initiative builds upon the administration's previous dismantling of the US Agency for International Development, which had been the world's largest foreign aid agency. USAID had a $25 billion annual budget and provided global health aid, food assistance, education programs and disaster relief to developing countries around the world. President Donald Trump and his allies, including Elon Musk, have argued that USAID was rife with waste, fraud and abuse, justifying its dismantling as part of a broader critique of foreign aid inefficiency.
The US is planning to introduce the 'trade over aid' idea at the UN at the end of April, according to multiple sources. The initiative is meant to encourage UN member states to 'make pro-business reforms' to their aid processes by facilitating conversations between governments, the private sector and international organizations, the directive states. The proposal calls for 'free market' policies to attract foreign trade that include 'limited regulation, low taxation, multiple energy sources, private property rights, sanctity of contracts, and a trusted judiciary,' aiming to create a more favorable environment for US business interests globally.
Secretary of State Marco Rubio ordered all diplomats to issue a démarche to all foreign nations by Monday that asks them to support the new 'trade over aid' initiative, according to a cable reviewed by The Washington Post. Signing on to the proposal is nonbinding and does not create obligations or require changes to national laws, but it represents a diplomatic push to align international support with US economic priorities.
This US initiative emerges against a backdrop where Western nations, including Germany, Sweden, Canada and Norway, have been reducing foreign aid since at least 2022, signaling a broader trend of declining traditional assistance. The United Nations remains committed to putting in place its sustainable development agenda by 2030, which includes ending poverty, achieving gender equality and urgently tackling climate change, creating potential tensions with the US focus on trade-driven approaches.
The UN is warning against privatizing a global aid system that delivers crucial assistance to some of the world's most vulnerable populations. The latest move is seen by the UN and other international organizations as further abandoning the aid system at a moment of growing conflicts around the world, while increasing the risk of exploitation by for-profit companies, which could undermine humanitarian efforts.
Several key unknowns remain about the implementation and reception of this initiative. It is unclear which specific nations have been contacted by US diplomats with the démarche and how many have agreed to support the initiative by the Monday deadline, leaving the diplomatic response uncertain.
Additional uncertainties surround the practical consequences of the USAID dismantling and the policy's broader scope. How the dismantling of USAID has specifically impacted ongoing humanitarian aid programs and which organizations are filling the gap has not been comprehensively documented, and the specific policy reforms to replace USAID's functions remain undefined.
The potential legal or diplomatic consequences for nations that choose not to support the US-led 'trade over aid' initiative at the UN remain undefined, though the proposal itself is nonbinding, and the full scope of the policy's implications for global aid architecture is still emerging.
The initiative represents a profound shift in global aid philosophy that could reshape how humanitarian assistance is delivered worldwide. By prioritizing private sector engagement over government-to-government aid, the US is challenging decades of established development practice, potentially leading to conflicts with UN goals focused on sustainable development and poverty reduction.