The United States has significantly reduced its overseas development and aid programs, with the State Department announcing on Wednesday that multi-year contracts have been slashed by 92 percent, or approximately $54 billion.
The decision follows an executive order signed by President Donald Trump on his first day in office, which froze all US foreign aid for 90 days. The freeze was implemented to allow the administration time to review overseas spending and eliminate programs that did not align with Trump’s “America First” agenda.
The review primarily focused on foreign assistance contracts managed by the US Agency for International Development (USAID). After a comprehensive review led by USAID leadership and Secretary of State Marco Rubio, nearly 5,800 contracts, valued at $54 billion, were identified for cancellation as part of the administration’s cost-cutting measures.
The review also included over 9,100 foreign aid grants worth more than $15.9 billion. Of these, approximately 4,100 grants, totaling nearly $4.4 billion, were targeted for elimination, representing a 28 percent reduction in grant funding.
A State Department spokesperson explained that these reductions would allow the agency to focus on the remaining programs, identify efficiencies, and better align future initiatives with the administration’s priorities. The spokesperson also clarified that essential programs, such as food assistance, life-saving medical treatments for diseases like HIV and malaria, and aid to countries like Haiti, Cuba, Venezuela, and Lebanon, would remain unaffected.
The drastic cuts come amidst legal challenges. A federal judge had ordered the Trump administration to unfreeze all foreign aid within two days, after a previous court order was ignored. However, the administration filed a petition for a stay on the lower court’s ruling, which was granted by US Supreme Court Chief Justice John Roberts on Wednesday.
The decision to scale back USAID operations has had a significant impact on its workforce. Prior to the freeze, USAID employed more than 10,000 people. Following the cuts, the agency announced on February 23 that it would lay off 1,600 employees in the United States and place the remaining staff on administrative leave.
This move aligns with President Trump’s campaign promise to reduce federal spending and bureaucracy. To implement these goals, Trump appointed his top donor and close advisor, billionaire Elon Musk, to lead the newly established Department of Government Efficiency (DOGE).
The changes reflect a shift in US foreign policy under the Trump administration, as it seeks to reshape its approach to international aid and prioritize domestic interests.
