US suspends most foreign aid: What Trump admin's order means for the world

US foreign aid faces a major overhaul as Secretary of State Marco Rubio suspends most funding, sparing only military aid to Israel and Egypt

US Secretary of State Marco Rubio has announced the suspension of most US foreign aid, making exceptions only for military assistance to Israel and Egypt. This decision, revealed in a State Department memo, represents a significant shift in American foreign policy, with widespread consequences for nations dependent on US support.

 

The internal memo, obtained by The New York Times, outlines that “no new funds shall be obligated for new awards or extensions of existing awards until each proposed new award or extension has been reviewed and approved … as consistent with President Trump’s agenda.” The halt is part of a larger effort to align foreign aid spending with the Trump administration’s policy goals.

 

 

Global impact of halting foreign aid

 

The directive is expected to freeze a wide range of aid programmes, including military support to key partners like Ukraine. Under President Joe Biden, Ukraine received billions of dollars in US military aid to counter Russian aggression. Rubio’s memo, however, specifies that military assistance to Israel and Egypt will continue uninterrupted.

 

Israel, a critical US ally in the Middle East, relies heavily on American arms packages, particularly in the wake of its conflict with Hamas. Egypt, another long-time beneficiary, has received substantial defence funding since its 1979 peace treaty with Israel.

 

Trump’s 90-day foreign aid pause

 

Shortly after taking office, President Donald Trump implemented a 90-day freeze on foreign aid, pending a comprehensive review of its effectiveness. Rubio’s memo sheds new light on this pause, revealing the broad scope of the freeze, which includes development, health, and educational aid.

 

Critics in Congress have raised concerns over the legality of the suspension, noting that the federal budget, including foreign aid, falls under Congressional control. One Congressional source warned that halting US aid could force international partners to seek funding from competitors like China and Russia, diminishing US influence globally.

 

Chaos among aid organisations

 

The freeze has already disrupted US-funded programmes worldwide. The memo directed agencies to halt all activities, pending Rubio’s review of each case. A former USAID official described the situation as “manufactured chaos,” warning that essential services, including HIV/AIDS treatment, maternal health care, and food security initiatives, are being jeopardised.

 

For example, in Ukraine, critical aid projects—ranging from emergency maternal care to vaccination programmes—have been paused. Decisions on whether these programmes will continue hinge on the results of an 85-day review period.

 

Why Israel and Egypt are exempt

 

Rubio’s order makes it clear that military assistance to Israel and Egypt will not be affected. Israel receives approximately $3.3 billion annually in US military aid, while Egypt benefits from about $1.3 billion. These exemptions reflect the strategic importance of both nations to US foreign policy, particularly in the volatile Middle East.

 

However, the timing of this decision is notable. The Gaza Strip remains in urgent need of humanitarian aid following a ceasefire between Israel and Hamas, and crises, like the famine in Sudan, are worsening.

 

Ripple effects on US influence

 

The freeze could also disrupt US military funding to several countries, including Ukraine, Taiwan, and the Baltic nations, all of which rely on American support to counter regional threats. It could also affect Lebanon’s military, which has been working to stabilise the region and reduce Iranian influence.

 

Critics argue that the freeze undermines US credibility as a global leader in foreign aid. For now, Rubio’s review process will determine the fate of many programs, leaving international partners uncertain about the future of their collaboration with the United States.

 

(With inputs from agencies)