The Trump administration is intensifying pressure on the United Nations and the international aid sector to embrace trade-focused policies that benefit US companies, threatening further budget cuts if demands are not met.
Mass Layoffs and Agency Closures
During Donald Trump's second term, USAID experienced mass layoffs, with its remaining operations folded into the State Department. This move has had a ripple effect globally, with experts warning it will cost thousands of lives due to the termination of vital programs. The administration has also largely suspended support for agencies such as the World Health Organization, the UN Human Rights Council, and UNESCO.
'Trade Over Aid' Initiative
Last week, the Trump administration unveiled a 'trade over aid' initiative at the United Nations, signaling a shift from donor-focused development assistance to greater private investment. The administration describes this as 'an international economic development vision built on free markets.'
According to the news website Devex, two US diplomatic notes circulated in Geneva and New York made it clear that the US is willing to use the threat of budget cuts to force through its agenda. One note indicated that the US would only pay 'a significant portion' of its UN dues if the body implements budget-slashing reforms, including overhauling the UN pension scheme and cutting travel costs. Additionally, the US would only make an extra payment to UN peacekeeping budgets in exchange for a 10 percent reduction in peacekeeping missions.
Humanitarian Consequences
The dismantling of USAID led to the firing of nearly all of its 16,000 employees, and an estimated 280,000 contractors, partners, and local hires worldwide lost their jobs. Oxfam America estimates that at least 23 million children could lose access to education, and up to 95 million people could lose access to basic healthcare. The organization also warns of more than 3 million preventable deaths per year as a result of the closure.
UN Secretary-General António Guterres stated that the funds the US owes are 'non-negotiable,' and earlier this year warned of an 'imminent financial collapse' due to unpaid fees, most of which are owed by the US.
Strained UN Agencies
The UN's refugee agency, UNHCR, estimates that 3.2 million people in Iran and 1 million in Lebanon have been displaced since the Iran war began two months ago. With staff cuts of 30 percent last year, the agency needs an additional $61 million to support 600,000 people over the next three months. Its operations are 'dramatically underfunded,' particularly in Lebanon, Syria, Iran, and Afghanistan.
The UN's Office for the Coordination of Humanitarian Affairs (OCHA) campaign to raise $23 billion to support 87 million people worldwide this year is only one-third funded. The World Food Programme estimates that nearly 45 million more people could face acute hunger if the war does not end by mid-year and oil prices stay above $100 per barrel.
US-UN Tensions
Relations between the US and the UN have rarely been so strained. In February, US Secretary of State Marco Rubio criticized the UN for having 'virtually no role' in resolving conflicts and called for significant reforms. In March, Rubio directed US diplomats to seek support from foreign officials for the 'trade over aid' initiative.
US Ambassador Mike Waltz insisted that the initiative does not mean the US is walking away from aid, but rather 'shifting the old ways of doing business.' At a launch event attended by representatives of Walmart, Bank of America, Goldman Sachs, and Palantir, Waltz stated, 'Free-market principles remain the best proven path to lasting prosperity.'
Expert Opinions
Amrita Saha from the Institute of Development Studies acknowledged that international trade can create benefits but warned that 'trade creates both winners and losers, and the benefits are often unevenly distributed.' She added that 'trade cannot operate as disjoint with broader development goals.'
Thomas Weiss, a scholar of international relations at the City University of New York, noted the irony that the 'trade not aid' stance was originally championed by developing nations in the 1960s. He believes the current push is driven by short-term politics rather than a long-term view of UN history, serving as a justification to cut USAID and other forms of assistance.
