US suspends existing foreign aid, puts new assistance on hold: Report

New Delhi, Jan 25: The US State Department has suspended nearly all existing foreign aid and put on hold the new assistance, according to an internal memo cited by BBC News.

The leaked notice follows an executive order signed by President Trump on Monday, mandating a 90-day pause on foreign development assistance to assess its efficiency and alignment with his administration’s foreign policy objectives, as reported by the BBC.

According to government figures, the United States allocated $68 billion to international aid in 2023, making it the world’s largest donor. The State Department memo, as reported by the BBC, indicates that the freeze applies broadly across development and military aid, with exceptions granted only for emergency food assistance and military funding directed toward Israel and Egypt.

The memo states, “No new funds shall be obligated for new awards or extensions of existing awards until each proposed new award or extension has been reviewed and approved.” It further instructs US officials to “immediately issue stop-work orders, consistent with the terms of the relevant award, until such time as the secretary shall determine, following a review.”

Under the Trump administration and foreign policy directives, there is going to be a comprehensive review of all foreign assistance to be conducted within 85 days.

Secretary of State Marco Rubio, who heads US diplomacy, has previously emphasised that American spending abroad should only continue if it makes the country “stronger,” “safer,” or “more prosperous.”

Speaking to the BBC, former senior State Department official Josh Paul described the decision as having a “potentially huge” impact on US-funded foreign aid programmes.

“One can imagine, for example, the humanitarian demining programmes around the world suddenly being told to stop work. That’s a pretty big deal,” Paul said.

Dave Harden, a former US Agency for International Development (USAID) mission director in the Middle East, also weighed in, telling the BBC that the move could immediately suspend critical humanitarian and development projects funded by the US globally.

He noted that programmes addressing water, sanitation, and shelter could be among those affected.

Reflecting on past experiences, Harden added, “I have gone through [assistance suspensions] many times when I was the West Bank and Gaza mission director, but that was specific to that account. This is global.” He further described the measure as “extremely broad,” as it not only halts new assistance but also imposes a “stop work” order on already funded and ongoing contracts.

The AFP news agency, cited by the BBC, reported that the funding freeze might also impact Ukraine, which received billions in military aid under Trump’s predecessor, Joe Biden.

Rubio’s memo justifying the aid suspension stated that the administration needed time to evaluate whether existing commitments were “not duplicated, are effective, and are consistent with President Trump’s foreign policy.”

However, certain exemptions have been granted. According to the memo, emergency food assistance will continue, and waivers have been issued for foreign military financing to Israel and Egypt, as well as for administrative expenses required to manage these funds.

The policy shift comes at a time of heightened humanitarian needs worldwide, including increased aid efforts in Gaza following a ceasefire between Israel and Hamas, and ongoing hunger crises in countries such as Sudan.