How will Trump's US aid freeze affect the Pacific?

The pause is for a 90-day assessment of efficiencies and consistency with US foreign policy.

The pause applies to the creation of any new obligations and "to disbursements of development assistance funds to foreign countries and implementing non-governmental organisations, international organizations, and contractors".

Any exemptions to the pause must be approved by Trump's new Secretary of State, Marco Rubio.

Dr Cameron Hill is a senior research fellow at the Australian National University's Development Policy Centre.

RNZ Pacific asked him what this pause might mean for US aid in the Pacific.

(The transcript has been edited for brevity and clarity.)

Cameron Hill: Look, I think it is important to put US aid to the Pacific in some perspective. According to the latest data, in 2022, US aid to the Pacific comprised about 6 or 7 percent of total aid to the region, and that compares, say, to Australia, the region's biggest donor, which provided about 37 percent of total aid. So, the US is an important donor to the Pacific, but it is by no means the major, or even a major donor to the Pacific.

I think the freeze is important in the sense that it does raise the prospect of the US stepping back from some key sectors in the Pacific, particularly climate change - a big focus of the Biden administration's efforts to strengthen its ties with the region. We could see a big retrenchment on US climate aid to the region and that'll be noticed by the region's leaders and also by China.

Don Wiseman: Yes, as I understand it, the countries that have compacts of free association that money is not touched by this move, but places like Papua New Guinea and they signed this significant security deal, I think, just a year or so ago with the US. How much impact will it have there?

CH: That's right. On the compacts, I think the sense is that it would be very hard for Trump to override those because they have been mandated by Congress, and that's where the bulk of US aid to the Pacific does go is to the three compact states, Palau, the Marshall Islands, and the Federated States of Micronesia.

US President Donald Trump speaks in the Roosevelt Room at the White House on 21 January, 2025, in Washington, DC. Photo: AFP

DW: Technically, of course, you wouldn't consider it aid, would you, since it's part of a longstanding arrangement that's got a lot to do with American security.

CH: That's right, but that compact aid does provide important social and economic assistance to those countries, and is considered important to those countries. Not just the security aspects, but also those economic and social programs, but on PNG.

I mean, as part of, the attempt to strengthen the relationship with PNG, there was an attempt to strengthen the US development presence in PNG. PNG was one of the countries that was included in a broader US effort to strengthen its aid, and aid effectiveness, in so called fragile states. And part of that did include programs on conflict prevention, gender equality, disability inclusion and climate change. So potentially, programs around inclusion and gender equality and climate change, I expect will be targeted during this review.

The USAID website has already taken down the pages talking about USAID's approach to gender equality and disability inclusion, and I suspect the same is probably done to, USAID materials that relate to climate change.

They're certainly on the chopping block, and they have been part of the US attempts to strengthen its engagement with PNG, as well as other countries in the region.

DW: There are elements within the wider Trump administration who are advocating a complete end to foreign aid. Do you think that may well happen?

CH: We'll certainly see significant changes, but I suspect those more radical kind of elements of Trump's entourage that might be pushing for the complete abolition of American aid will come up against some of the more moderate defenders of aid within Trump's cabinet and within the Congress, including among more moderate Republicans, who see aid as an important part of America's foreign policy tools and a key part of its ability to kind of compete with China.

I suspect we'll see some of that debate will spill over into the public domain. We'll see a fair bit of confusion and disorder, which we've already seen with this freeze, and there will be some contention within the administration around aid. But I suspect those more radical calls will be balanced by those who see the need for a more pragmatic approach, particularly when it comes to competition with China.

DW: Okay, so this more pragmatic approach, presumably would see a restoration. How far away do you think that might be? Could that be years?

CH: I think it's too early to tell. The first indication we'll get is when this this 90 day review, which is being undertaken now, is completed. That's some time towards the middle or end of April when we'll get a sense of where this is going to wash out.

But again, what we'll see is the US aid under under Trump moving away from sectors like gender equality, inclusion, climate change. And perhaps we'll see a greater emphasis on some of the things that were talked about in the Project 2025 document, which came out a couple of years ago, and which is guiding some of these efforts [and] which talks more about private sector development and also places more of an emphasis on working with faith based organizations, including churches, as well as using aid to pursue America's kind of more narrow geopolitical and national security interests.

We'll see a change of emphasis, but we'll have to wait till this review comes out.

- RNZI