Filling the void: Why the EU should step up amid Trump’s foreign aid cuts

The withdrawal of US foreign aid could exacerbate humanitarian crises and trigger political instability, jeopardising the EU’s own interests

A villager tends to his vegetable garden in a plot that is part of a climate-smart agriculture program funded by the US Agency for International Development in Chipinge, Zimbabwe, September 19, 2024
Image by picture alliance / ASSOCIATED PRESS | AU
©

Problem

On his inauguration day, US president Donald Trump issued an executive order implementing a 90-day pause in American foreign development aid to assess program efficiency and alignment with foreign policy. This move signals a shift to a more transactional and domestically focused approach by the country that remains the top provider of official development assistance (ODA) globally.

The scope of affected programmes is unclear. While funds already disbursed or obligated programs appear safe, new initiatives must now meet specific criteria: “Does it make America safer? Does it make America stronger? Does it make America more prosperous?” with final decisions resting with secretary of state Marco Rubio. This puts initiatives focused on gender, diversity, equity, inclusion, climate and health at risk. The decision to withdraw from the World Health Organization via another executive order raises further concerns about short- and long-term consequences for developing countries and the US amid intersecting crises like climate change, disease and conflict.

Although military aid to Ukraine remains unaffected for now, the European Union must prepare for potential reductions or reprioritisation of US aid, which could threaten global development and geopolitical stability. Despite budgetary constraints, the EU must leverage its development funding to counterbalance US withdrawal and compete with China. This approach is essential to mitigate the far-reaching consequences of reduced aid. Failing to do so risks worsening humanitarian crises, violence, conflict, and political instability—outcomes detrimental not only to recipients but also to the EU’s own interests.

Solution

The EU and its member states collectively represent the largest global provider of ODA. As such, the bloc should harness the strength that comes from acting together and speaking as one voice.

Development funding should be better coordinated to prevent fragmentation caused by dissent in the bloc. And to ensure that public commitments are translated into action, stronger monitoring tools for accountability should be introduced. Bilateral development efforts should prioritise common goals instead of presenting disjointed national contributions or even competing strategic objectives.

The EU should collaborate with like-minded partners such as the UK, emphasising shared interests in supporting Ukraine and strengthening global development. It should also engage with the US on the strategic importance of development funding, reminding its ally that, in a highly interconnected world, the US stands to benefit from supporting development globally. Additionally, the EU and the US would benefit from counterbalance China’s growing influence through aid investments in the global south by presenting themselves as alternative leading powers committed to development.

Finally, if the EU is to regain credibility with its partners in the global south, it must engage in meaningful dialogue by listening to the needs and priorities expressed by these countries. Moving away from coercive conditionality and paternalistic behaviour is essential to rebuild trust and establish long-term, equitable development partnerships.

Context

Trump’s executive order echoes trends found on the other side of the Atlantic as foreign aid is also declining from the EU.

Germany, the bloc’s largest donor, has announced severe cuts to its humanitarian aid budget, while France has also significantly reduced its development spending. In Sweden and the Netherlands, right-wing governments are pursuing ideological funding cuts. Smaller donors, such as Finland and Switzerland, have similarly scaled back, driven by both budget concerns and ideological reasoning.

At the same time, the EU has acknowledged and pivoted toward more strategic multilateral development cooperation with initiatives such as the €300bn Global Gateway. This programme aims to support infrastructure in the developing world  including on digitalisation initiatives and vaccine manufacturing. While promising, these efforts must overcome the challenges of fragmented funding and geopolitical competition.

The European Council on Foreign Relations does not take collective positions. ECFR publications only represent the views of their individual authors.

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