Trump's transactional turn tests trusted ties

On his first day as president, Donald Trump signed a series of executive orders that marked a clear shift in the United States (US) foreign policy priorities. He withdrew the US from the Paris climate agreement, reminiscent of his first term, reaffirming his "America first" doctrine, which focuses on cutting aid to unworthy countries. Trump also announced a return to the "peace through strength" mantra, echoing Ronald Reagan's philosophy, particularly regarding Ukraine. However, specifics on a peace plan remain scarce.

 

Additionally, Trump temporarily paused all US foreign aid for 90 days, allowing for a comprehensive review. Senator Marco Rubio, supporting the move, articulated a framework for future aid: "Does it make America safer? Does it make America stronger? Does it make America more prosperous?" This reflects Trump's longstanding criticism of foreign aid spending and his desire to ensure US resources are strictly tied to national interests.

 

 

In his new term, President Trump aims to reshape US foreign assistance to meet the challenges of great power competition and advance American interests. Central to this vision is redefining aid priorities beyond income-based criteria. Rather than withdrawing support from middle-income nations, Trump's strategy focuses on countries critical to US strategic interests.

 

 

Foreign aid isn't just charity. It's a strategic investment in global stability. Originating from the Marshall Plan's rebuilding of war-torn Europe in 1948, the US has refined its aid structure through the 1961 Foreign Assistance Act. Today, foreign aid encompasses more than cash transfers. It funds emergency responses, agriculture, health care, and peace-building. Beyond moral imperatives, foreign aid fosters a safer, interconnected world. Pandemics, climate crises, and geopolitical unrest do not respect borders. A well-funded aid program isn't just altruism-it's pragmatic defense.

 

 

In 2023, US foreign aid expenditures reached $68 billion, a decrease from $76 billion in 2022, yet it remains among the highest figures recorded since the 1950s. Ukraine emerged as the largest beneficiary, receiving $17 billion, underscoring its strategic importance in the face of Russian aggression. Israel followed with $3.3 billion, primarily allocated for military assistance. Contrary to popular belief, most aid doesn't go directly to foreign governments. Instead, organisations like USAID and Concern Worldwide channel funds to NGOs, supporting localised solutions. Economic aid represents two-thirds of spending, while the remainder strengthens military alliances critical to US security.

 

 

In a nation where public perception often skews far from reality, foreign aid is one of the most misunderstood aspects of US policy. Many Americans believe it consumes 25 per cent of the federal budget, but it accounts for just over 1 per cent. Even slashing it entirely would barely dent the US's $244 billion deficit. Yet, this modest expenditure yields immense returns-not only for recipients but also for US interests.

 

 

The composition of US foreign aid has also evolved, with military assistance now constituting only 12 per cent of total spending, the lowest proportion since 1949, while economic and humanitarian aid has surged to 88 per cent. Despite the critical geopolitical role of foreign aid, it remains a largely misunderstood component of federal expenditure. Public opinion polls indicate a widespread misperception, with most Americans believing that foreign aid consumes approximately 26 per cent of the federal budget, whereas it represents less than 1 per cent.

 

 

Despite the US being the largest donor in absolute terms, it ranks 26th globally in foreign aid relative to its Gross National Income (GNI). In contrast, countries like Norway and Sweden contribute a much larger percentage of their national incomes to aid. Critics often label US foreign aid as excessive; however, evidence suggests that such investments play a crucial role in enhancing national security by stabilising volatile regions, building strategic alliances, and mitigating adversarial influence.

 

 

In the coming years, President Trump's foreign aid strategy will likely continue to emphasise a transactional approach, treating aid as a tool for geopolitical leverage rather than a purely diplomatic instrument. Under this model, foreign assistance will be directly tied to advancing Trump's national interests, with funding contingent on whether recipient nations align with American policy goals.

 

 

Moving away from the long-term development focus of previous administrations, Trump will focus on a strategy that will use aid as a bargaining chip in negotiations, offering rewards for cooperation and imposing cuts as punitive measures. This shift will maximise immediate returns on investment, ensuring US resources influence migration control, trade agreements, and voting behaviour in global institutions, making foreign assistance more strategically aligned with America.

IMPACT ON BANGLADESH: Bangladesh has historically been a major recipient of US foreign assistance, significantly supporting its development, health, education, and humanitarian efforts. US aid has been vital in sectors like healthcare-addressing maternal and child health and infectious diseases-and in bolstering education and vocational training for marginalised groups. Investments in infrastructure, particularly in transportation and energy, have facilitated economic growth and job creation.

 

 

However, the recent pause in US foreign assistance poses challenges, threatening ongoing initiatives and creating uncertainty in the health and education sectors. This freeze could strain diplomatic relations, as Bangladesh might perceive it as a reduced commitment from a longstanding ally, potentially shifting its foreign policy towards nations like China or India. Economically, US businesses may hesitate to invest in Bangladesh, impacting critical industries reliant on US investments.

 

 

Moreover, the suspension could exacerbate humanitarian issues, especially concerning the Rohingya refugee crisis, leading to increased pressure on local resources. In the long run, Bangladesh may seek to diversify its support sources if US assistance remains uncertain. However, renewed commitment from the US could facilitate more strategic aid aligned with mutual policy goals.

 

 

A shift in US foreign aid policies will significantly affect Bangladesh's vibrant NGO sector, crucial in delivering services across health, education, poverty alleviation, and humanitarian relief. Many of these organisations rely heavily on US funding, mainly through agencies like USAID, to implement community-based projects that uplift vulnerable populations. A pause or reduction in aid could disrupt ongoing initiatives, forcing NGOs to scale back operations, reduce staffing, and halt critical services.

 

 This impact would be felt acutely in rural and underserved areas, where U.S.-funded programs address maternal health, child nutrition, and disaster preparedness. The resulting funding gaps could compromise progress in key social sectors, highlighting the sector's financial fragility amid shifting geopolitical priorities.

If President Trump's transactional approach to foreign aid makes US assistance conditional on Bangladesh aligning with American policy goals, the implications could challenge Bangladesh's regional and global relationships. Given its strategic location in South Asia, Bangladesh has balanced partnerships with various powers, including China and India, while maintaining robust ties with the United States. A scenario where continued US aid hinges on policy alignment-potentially on contentious issues like trade, security, or geopolitical influence-could strain Bangladesh's autonomy in diplomatic decision-making.

 

 

Such conditions may force Dhaka to reconsider the value of US aid relative to the cost of compromising its broader foreign policy interests. Bangladesh may prioritise diversifying its development partnerships and strengthening ties with nations that offer more flexible cooperation terms. This recalibration would reflect a strategic shift toward reducing aid dependency and enhancing economic self-reliance, focusing on investments that do not constrain its regional initiatives. Balancing strategic autonomy with the benefits of international assistance would be critical for safeguarding Bangladesh's long-term economic and geopolitical stability.

 

 

In addition to the foreign aid, there are other concerns, too. Bangladesh's ready-made garment (RMG) sector is a cornerstone of its economy that relies heavily on the US as a significant export destination. Under President Trump's transactional foreign policy approach, trade preferences could become conditional on Bangladesh aligning with US political and strategic interests. If market access or tariff policies are leveraged as bargaining tools, the stability of Bangladesh's RMG exports to the US could be jeopardised.

 

 

This scenario would introduce uncertainty for manufacturers and exporters, potentially leading to higher costs, reduced competitiveness, and a destabilised supply chain. Such a shift would pressure Bangladesh to diversify its trade partnerships while navigating complex policy demands to safeguard its most vital export market.

 

 

Bangladesh, like many other recipients of US foreign aid, faces uncertainty under a transactional approach that ties assistance to alignment with American geopolitical objectives. The temporary pause in funding signals a broader shift in aid allocation, placing strategic interests over development priorities.

 

 

For nations that have built critical programs on US support, this recalibration introduces risks of stalled projects, economic disruptions, and strained diplomatic relations. As the review unfolds, Bangladesh must prepare for a bumpy ride, balancing its national interests with shifting US demands while exploring diversified partnerships to mitigate potential vulnerabilities and ensure sustainable growth and stability.

 

 

The writer is a political and international affairs analyst.