Allies demand back $15 million from USAID amid funding freeze

In early 2017, following President Donald Trump's inauguration, a significant funding freeze was instituted at the U.S. Agency for International Development (USAID). This freeze affected various foreign aid programs that included contributions from multiple European allies, notably Sweden, Norway, and the Netherlands. The collective amount contributed by these three countries for joint development efforts, particularly aimed at low-income countries, totaled around $15 million, which remained unspent at USAID. The funds were specifically allocated for a project known as Water and Energy for Food (WE4F), designed to assist farmers in poorer regions in enhancing food production while minimizing water usage and environmental impacts. Julia Lindholm, a spokesperson for Sweden's international development agency, expressed concerns regarding the funds being stalled, emphasizing the adverse effects on approximately 6 million vulnerable farmers reliant on these resources for food security. As frustrations grew due to a lack of communication from USAID regarding the status of their funding, these countries initiated inquiries and warned of escalating their concerns to local media if the situation remained unaddressed. The tension was amplified by the administration's drastic cutbacks, which involved the cancellation of a significant portion of USAID contracts, as noted by Secretary of State Marco Rubio. These decisions led to severe consequences for partner organizations, forcing layoffs and in some cases, driving them out of business altogether, raising further doubts about the United States' reliability as a financial partner. Former defense and intelligence officials criticized these actions, warning that the cancelation reflected a broader disregard for U.S. financial regulations. The EU and Canadian tariffs imposed by Trump added to the discontent among traditional allies, affecting the perceived credibility of the U.S. in global partnerships. The issue was not just a financial grievance; it symbolized a rupture in trust between the U.S. and its allies. The administration showed indications of narrowing foreign development focus, turning predominantly towards containment of China's influence, leaving significant questions regarding its commitments to other international partnerships. Since this funding freeze, many partners in international development have been re-evaluating their partnerships with the U.S. This context of growing concern has culminated in ongoing dialogues among these nations about potentially redirecting their development programs independently of USAID, further indicating the rift caused by the freeze. As of yet, no definitive resolution has been reached regarding the funds held up in USAID accounts, leaving foreign partners in a precarious position.