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US Freezes All Foreign Aid Except for Israel and Egypt

Updated: 12 hours ago

A woman carries a bag of rice distributed by the U.S. Agency for International Development (USAID) in Port-au-Prince, Haiti. (Carlos Barria/Reuters)
A woman carries a bag of rice distributed by the U.S. Agency for International Development (USAID) in Port-au-Prince, Haiti. (Carlos Barria/Reuters)

The US has recently decided to freeze all foreign aid except for Israel and Egypt.


President Donald Trump executed the order based on expenses and political strategy realignments. This has generated international repercussions that dismay countries worldwide and weave instability through global economic systems.


As a direct response, many donor states that previously funded aid at generous levels have started reducing their official development assistance (ODA). For instance, Sweden's dedication to donating 1% of its Gross National Income for ODA has changed; the country plans to trim $4.7 billion from its aid budget through 2026. Despite earning the highest revenue from oil and gas in its history, Norway decreased its foreign aid budget by $460 million. Finland and Switzerland have both reduced their foreign aid contributions, although at smaller increments. Total global aid has not yet decreased continuously, but its distribution has experienced major changes. The rising international political tensions shift funding from conventional development grants to more strategic economic partnerships. The US government sustains financial support to Israel and Egypt due to their contribution to regional stability through diplomatic and defense relationships.


On the surface level, Trump's "Project 2025" initiative seems to serve as the basis for this decision, seeking to evaluate US international financial obligations. The administration justifies the aid freeze by asserting that foreign policy significantly influences global spending choices and acts in favor of the US's national security interests.


However, it can perhaps be argued that recent changes in foreign aid from other countries are the underlying factors behind the US decision. An OECD report shows that the world achieved its largest-ever foreign aid expenditure at $223 billion in 2023. In 2024, eight wealthy countries reduced their aid commitments by $17.2 billion, with further expected decreases throughout the next five years. The Netherlands, along with Germany, France, and the United Kingdom, form part of this group. The Dutch government has revealed its intention to reduce aid spending by €8 billion until 2028; a €1 billion reduction in funding for civil society organizations has already gone under. Both Germany and France have decreased their aid contribution to development; Germany reduced spending in this area by €2 billion, and France did not fulfill its promise to offer aid at a rate of 0.7% of its gross national income. The European Union plans to decrease aid programs by €2 billion across the following two fiscal periods, which will affect assistance programs for poverty-stricken nations.


US and European foreign policies have now started prioritizing the redirection of assistance among strategic allies, known as "friend-shoring," for economic and geopolitical advantages. For example, wealthier nations allocate increasing portions of their refugee support budgets to domestic needs because of rising expenses from refugee hosting. The World Bank declares that reduced fiscal support will jeopardize the ability of low-income countries to manage their humanitarian challenges created by conflicts, economic conditions, and climate change. Joe Biden's proposed World Bank contribution, worth $4 billion, remains uncertain because of new political directions adopted by the US government.


What are the implications for Türkiye?


Over the last few years, through various forms, Ankara, the capital of Türkiye, has received military aid, economic investments, and refugee relief programs from the US. Although Türkiye depends on American financial support comparatively less than other nations, it will likely still experience negative effects, mainly within defense sectors and infrastructure development programs. The suspended assistance threatens to make US-Türkiye relations more difficult since the pair faces numerous disagreements about military pacts, trade issues, and regional battlefield strategies.


As a result of this hindered relationship, Türkiye may likely seek alternative international partnerships, leading to new alliances. For instance, Ankara's current focus is on building Gulf state trade links, EU collaboration, and Asian economic agreement negotiations to advance its international economic ties. Most importantly, Türkiye demonstrates increasing regional authority across Central Asia, which can expedite its process of assuming power over regions from which the US has cut aid.


Overall, the reduction of foreign aid is not likely to lead to severe budget deficits, yet it might create significant hardships for disadvantaged populations. Funding redirection from developing countries creates obstacles to their progress in reducing poverty and enhancing education and healthcare, especially among nations dependent on foreign support. It is clear that the revision of US foreign aid policies under the Trump administration will produce substantial long-term impacts on international development efforts.


UPDATE: The previous version of the article included incorrect information about Turkiye's position in the US foreign aid bans. We failed to find credible resources to support this claim after further research and have completed the necessary corrections.

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