The second Trump administration rapidly initiated a series of transformative changes to U.S. foreign policy. Among the most sweeping, and with significant implications for U.S. national security and the United States’ role in the world, are the cuts to foreign assistance programming, agencies, and personnel. This digital report is Part I of a three-part series called A New Landscape for Development. It examines the context, current state, and early impacts of these dramatic changes in priorities, policies, and organizational structures. It also explores opportunities within this new landscape. The other parts include:

Part II: Examining Impacts, Capabilities, and Opportunities 
Part III: Recommendations 

U.S. funding for bilateral and multilateral foreign assistance efforts has consistently constituted less than 1 percent of the federal budget, despite stubborn popular misperceptions that foreign assistance accounts for up to 20–25 percent of annual U.S. federal spending. Cumulative U.S. foreign assistance over the years has made the country the biggest contributor to global development historically, providing $63.3 billion in official development assistance (ODA) in 2024. That comprised 30 percent of worldwide ODA. Within this total, the United States also contributed more than 40 percent of governmental humanitarian aid funding globally and 42 percent of governmental global health assistance.

In contrast with this baseline, the entire system and footprint of U.S. foreign assistance is undergoing massive change, including through the introduction of sweeping new priorities and the dismantling of traditional levers of influence.

A New-Look Federal Bureaucracy

Paired with the stark difference between the first and second Trump administrations’ approaches to foreign assistance programming, a large-scale termination of federal workers has targeted the foreign policy bureaucracy, alongside other agencies, during the second Trump administration. According to the Project on Public Service, over 211,000 U.S. government employees left government service between President Trump’s inauguration and October 23, 2025. That has left government agencies with diminished expertise and capabilities.  

The most extreme instance of this was the elimination of USAID as an independent entity, taking its staff from more than 10,000, many of whom were based overseas, to 15 legally required positions, a cut of more than 99 percent.  

The administration’s stated intention was for USAID’s remaining functions to be folded into the Department of State, which itself has not been immune from personnel cuts. As part of an organizational restructure meant to “increase functionality,” several offices in the Department of State have been reconfigured or eliminated. A June 2025 congressional notification indicated an intention to reduce the department’s workforce by up to 3,448 individuals, including the elimination of 1,873 domestic positions and the loss of another 1,575 individuals from voluntary departures. This constitutes approximately 18 percent of the workforce of the full department. At the time of writing, 1,353 of these layoffs have taken place. 

Given the historical focus of the Department of State on policy rather than contracting, there were concerns about its ability to integrate much of the contracting and foreign assistance capabilities of USAID into its operations even before the elimination of these positions. The substantial loss of personnel and expertise will no doubt increase those concerns. 

The elimination of offices and staff at the Department of State has not been evenly spread across its various entities. A particular target of the reorganization has been functional offices under the undersecretary for civilian security, human rights, and democracy. These offices, which the administration referred to as “prone to ideological capture and radicalism,” have been eliminated or restructured to better align with the priorities of the administration. According to one estimate, the Bureau for Democracy, Human Rights, and Labor (DRL) will see an 80 percent reduction in staff. This is particularly impactful in the context of foreign assistance, as the reorganization eliminates the bureau’s Office of Global Programming, a hub of grantmaking that is most akin to work previously done through USAID. 

It is not only the State Department and USAID that are likely to be impacted by changing institutional and personnel structures. Public rhetoric from the administration regarding various other agencies has led to significant concerns from government employees about the future of their institutions and roles. For example, the Millennium Challenge Corporation staff was told in April to expect a large reduction in staff and programming, which has led some to believe that the agency could be eliminated. The agency remains for now, but much of its programming is potentially imperiled.  

Understanding the Emerging Landscape

While much uncertainty about the future of U.S. foreign assistance remains, the administration’s actions and positions are beginning to paint a picture of the emerging landscape of U.S. engagement with developing and emerging economies.  

The administration’s rejection of many multilateral instruments, elimination of certain foreign policy tools, and villainization of bureaucrats tasked with implementing them have not been accompanied by a lack of foreign policy ambition. The Trump administration has moved forward with a policy of commercial diplomacy as a means to promote U.S. interests and build peace around the world, emphasizing dealmaking and transactions as near-exclusive metrics of success.  

While the administration has acted quickly to emphasize transactional commercial investments, other areas of foreign policy, such as climate change cooperation and the promotion of human rights and democracy, have been forcefully scrubbed from the agenda.  

In recent months, the administration has committed to cooperate with allies to counter Beijing by securing and diversifying critical mineral supply chains, many of which are sourced from developing countries. The United States also struck a minerals deal with Ukraine in April and mediated a peace deal between Rwanda and the Democratic Republic of the Congo in June, with the promise of commercial access to the latter country’s mineral wealth.    

A new government initiative, the American AI Exports Program, will aim to promote the global adoption of U.S. full-stack AI export packages, with potentially significant implications for how the United States competes in countries across the Global South. Additionally, the administration is promoting and leveraging infrastructure projects abroad that advance U.S. interests.  

Agencies pursuing commercial diplomacy, with goals of dealmaking and investment for U.S. companies, are poised to be empowered in the foreign policy sphere, potentially creating opportunity for new and innovative development approaches. 

Proposals for the U.S. International Development Finance Corporation (DFC) have included a potential quadrupling of its budget, a greater alignment with national security goals, and greater space for the agency to invest in higher-income countries, equipping it to play a leading role in advancing private sector–oriented development efforts through strategic investments. The smaller U.S. Trade and Development Agency has similarly so far avoided dismantlement. With its focus on project preparation for infrastructure investments, the agency is also poised to support an investment-oriented model. 

The Trump administration appears committed to leveraging the Department of the Treasury’s position and influence in economically impactful organizations such as the World Bank, regional banks, and the International Monetary Fund, despite its criticism of them. This position is notable in its contrast to the administration’s moves to withdraw from other types of multilateral institutions, such as the World Health Organization and the UN Human Rights Council.  

One major question concerns the role of data and evidence in decisionmaking moving forward. The administration has paused, limited, or eliminated data collection efforts crucial for informed policymaking in spheres such as health, humanitarian assistance, and the tracking of U.S. government spending. Even seemingly brief disruptions in coverage impair collection and analysis while casting doubt on the reliability and accessibility of critical information for evidence-based policymaking and an informed citizenry. 

Foreign Assistance and Foreign Policy in U.S. History

While distinct as a historic disruption due to its scale and speed, this is not the first shift in the development landscape since the modern era of U.S. foreign assistance began. Every administration over the last 80 years has aimed to align foreign assistance with its strategic objectives and policy goals. 

National security priorities have historically been a major driver of U.S. foreign assistance. For example, the Vietnam War era, the post-9/11 period, and the period following Russia’s full-scale invasion of Ukraine all saw increases in resources and attention from U.S. aid agencies.

Over time, a proliferation of aid and development actors reshaped the field of potential partners, programs, and options. The Organisation for Economic Cooperation and Development (OECD) club of donors expanded its ranks, and China’s Belt and Road Initiative, as well as related efforts, led to significant development financing across the Global South. Gulf states and other emerging powers have also vastly expanded their engagement; the United Arab Emirates is now the fourth-largest source of capital in Africa, and Qatar, India, Saudi Arabia, and others are increasingly involved in global development efforts.

Civil society organizations, philanthropic foundations, and corporations have all expanded their roles as stakeholders in the aid system over the years as well. 

In more recent decades, some dominant trends have shaped development efforts across multiple U.S. administrations. For example, over the past 25 years, a rising focus on leveraging businesses and private capital while better integrating technology and innovation has led to the establishment of many programs and organizational divisions. Within USAID, these included the Development Credit Authority, Global Development Alliances, and the Global Development Lab, among others, as well as multiple private sector engagement strategies. The transformation of the Overseas Private Investment Corporation into the U.S. International Development Finance Corporation serves as another illustration.

A focus on data, evidence, and results deepened and spread across all development programming, alongside large investments in global health programs spurred by the United States' historic commitment to the President’s Emergency Plan for AIDS Relief (PEPFAR). The pursuit of greater aid effectiveness led to transparency initiatives and efforts to increase partner-country ownership. Various attempts to diversify the U.S. government’s implementing partners and localize greater proportions of assistance programming permeated the initiatives of the Obama, Trump, and Biden administrations.

Just as global health programming grew as a share of U.S. foreign assistance, so did humanitarian aid in response to mounting impacts from conflicts, disasters, and population displacements. While health and humanitarian aid made up only 19.9 percent of total U.S. foreign assistance in 2001, this percentage jumped to 41.2 percent in 2020. Additionally, the impacts of climate change have exacerbated threats to public health, humanitarian crises, and many other aspects of development.

Various trends and national security imperatives have always shaped U.S. foreign assistance and development efforts. Some of the current pressures have been building for a long time, while others are new. Even though U.S. international development and humanitarian efforts have experienced many changes throughout the years, the present shifts represent a fundamental break with long-established approaches. That break presents challenges, and it also presents opportunities.