Technology Salon

Recent research found surprisingly little change in foreign assistance processes over the last 25 years, regardless of the Administration or its political affiliation.  That history is poised to change.

This was the basis for our Technology Salon that Envisioned USAID under Trump 2.0.

The incoming Trump administration, Republican leadership of the Presidency, House, Senate, and arguably, Supreme Court, Project 2025, Agenda 47, DOGE, and the next USAID Administrator (currently unknown) have a perceived mandate for change.  It doesn’t matter that USAID is less than 1% of the Federal budget – many eyes and knives will be studying the Agency.

Yet, the future is not all doom and gloom.

What to Expect with Trump 2.0

Trump 1.0 was a mixture of chaos and progress. In the midst of many domestic distractions, USAID was able to initiate the Gender Policy, Prosper Africa, W-GDP, Digital Connectivity and Cybersecurity Partnership, the Digital Strategy, Journey to Self-Reliance framework, and countered the PRC Belt and Road imitative.

Trump 2.0 will come in with changes – positive and negative, depending on your point of view – but will need to work with certain realities.  For example, 93% of USAID’s budget already earmarked by Congress, who will not want their specific desires reduced or redirected.

Also, we can make a clear link between areas in the Americas impacted by climate change, low levels of trust in national governments to protect citizens, and migration to the USA to escape these climate impacts.  Or the malign Kremlin and PRC efforts to discredit our allies and disrupt their economic ties with the USA.

Will this be enough to reduce negative impacts in foreign assistance or are we going to be a convenient target for partisan ire?

6 Potential Trump 2.0 Policy Changes

The incoming administration has signaled a shift in USAID’s focus to align more closely with national security and economic priorities.

1. USAID: A Shift in Priorities and Structure

Documents such as the Project 2025 plan suggest significant restructuring within USAID, emphasizing initiatives that serve U.S. strategic interests while scaling back programs deemed ideologically driven, such as those focusing on climate change, gender equity, and racial justice.

Key proposals include:

• Eliminating or Reducing Climate and Gender Programming: Programs perceived as advancing progressive agendas, such as climate adaptation or gender equality, may face cuts or elimination. The administration plans to redirect these funds toward energy and infrastructure projects with tangible economic returns.
• Focusing on Countering Strategic Rivals: The administration has suggested an emphasis on countering China’s Belt and Road Initiative through targeted infrastructure investments and trade facilitation programs in strategic regions like Southeast Asia, Africa, and Latin America.
• Shift to Economic Development: Emphasizing US private sector companies investing in USAID-presence countries as a source of US job and wealth creation, with a corresponding (conflicting?) focus on locally led development to reduce overall development costs and country reliance on aid.
• Budget Reductions: A consistent theme in Trump-era policy discussions has been reducing the overall foreign aid budget, viewing it as burdensome and misaligned with “America First” priorities. This could lead to smaller, more targeted aid programs focusing on countries of geopolitical significance.

2. DFC: Expanded Role in Strategic Investments

The DFC, established during Trump’s first term, is expected to take on an even greater role in international development. The administration has touted the DFC as a key tool for advancing U.S. economic interests while providing a counterbalance to China’s growing influence in developing economies.

Anticipated initiatives include:

• Increased Funding for Energy and Infrastructure: The administration is likely to prioritize investments in traditional energy sectors, including natural gas and coal, alongside renewable energy where economically viable.
• Public-Private Partnerships: Encouraging private sector investment in high-priority sectors such as telecommunications, manufacturing, and digital infrastructure, particularly in regions critical to U.S. strategic interests like Africa and the Indo-Pacific.
• Strategic Counter to China’s Influence: The DFC may play a central role in offering transparent and sustainable financing options to countries hesitant about China’s Belt and Road Initiative loans.

3. MCC: Reinforcing Economic and Political Partnerships

The MCC is expected to continue its work of providing compact grants to countries that meet strict governance and economic reform criteria. However, the Trump 2.0 administration may recalibrate MCC’s priorities to align more closely with its “America First” agenda.

Possible actions include:

• Geopolitical Focus: Targeting MCC compacts in regions of strategic interest, particularly those vulnerable to Russian or Chinese influence.
• Simplified Metrics: While maintaining a focus on governance and economic freedom, there may be a push to streamline eligibility criteria to expedite compact approvals.
• Enhanced Accountability: The administration may emphasize measurable economic returns from MCC investments, focusing on sectors like energy, trade, and digital transformation.

4. Reimagining Multilateral Engagement

Trump’s first term was marked by skepticism toward multilateral institutions, and his second term is likely to continue this trend. This could lead to:

• Reduced Funding to Multilateral Development Banks: Institutions like the World Bank and regional development banks may see diminished U.S. contributions.
• Focus on Bilateral Agreements: The administration may prioritize bilateral partnerships over multilateral efforts, emphasizing deals that provide clear benefits to U.S. businesses and interests.
• Critique of Global Development Frameworks: Programs aligned with Sustainable Development Goals could face reduced support in favor of bilateral efforts that emphasize measurable results.

5. Greater Scrutiny of Foreign Aid Effectiveness

The administration has consistently emphasized the need for foreign aid to deliver clear benefits to U.S. taxpayers and strategic goals. Potential initiatives in this area include:

• Auditing and Accountability: Comprehensive reviews of foreign assistance programs to assess their alignment with U.S. national interests.
• Performance Metrics: Expanding the use of performance-based funding models, rewarding countries and projects that demonstrate measurable outcomes.
• Private Sector Leverage: Increasing the role of U.S. businesses in development projects to ensure mutual benefits for domestic industry and developing country private firm innovation and growth.
• Increased MERL Focus: More funding for program monitoring and project evaluations to find what works (and doesn’t), though probably not a focus on using the learning from evaluations into improve aid vs. a reason to reduce funding.

6. Technology as a Key Development Tool

Digital development is likely to remain a focus, albeit with an emphasis on strategic objectives:

• Cybersecurity and Connectivity: Supporting digital infrastructure projects that enhance cybersecurity in developing countries, particularly to counter China’s influence in 5G and telecom sectors.
• AI and Data Governance: Promoting U.S.-led standards for artificial intelligence and data governance in emerging markets, offering alternatives to Chinese technologies.
• Tech-Focused Partnerships: Expanding initiatives like the Digital Connectivity and Cybersecurity Partnership (DCCP) to promote secure, high-quality internet access in underserved regions.

Specific Trump 2.0 Policy Winners and Losers

 

Impact Areas	Probability	Rationale
The reinstatement of Mexico City policy / Family Planning funding cuts	High Probability	Whenever the White House shifts political parties, so does the enforcement of the Mexico City policy. Family Planning programs are likely to see decreased funding and focus.
Shifts to America-First language and branding for Aid	High Probability	Focusing on American needs was a clear winner in this election. The more international development can tie work to how it impacts people ‘back home’ the more it will resonate with the administration and US citizens.
Increased focus on localization / Journey to Self Reliance at USAID	High Probability	J2SR gained momentum during Trump’s first administration. With an increased emphasis on tightening budgets, shifting aid to local institutions could be an ‘easy’ sell.
Humanitarian Assistance funding	High Probability	This continues to be a focus, with natural disasters and conflict eating up much of this budget. There doesn’t appear to be a shift from this in Trump 2.
Focus on MCC and DFC	High Probability	With a unified Republican government, there is likely a shift to increased focus on business investment and economic development. It also may minimize aid funding to conflicts and natural disasters.
Focus on efficiency and evaluation	High Probability	Thanks to DOGE and other efficiency-focused voices in the Trump administration, we should anticipate increased desire for and scrutiny on how things are getting done and what results are being realized.
Deal-making orientation for foreign aid	Medium Probability	This could look like a greater focus on private sector partnerships in development, quicker turnarounds on proposals, and an increased use of aid as an influence tool.
Executive Orders impacting operations	Medium Probability	There is an expectation the administration learned from its first time around and the Executive Orders will have clearer guidance. However, much like last time, the immediate impact of these could create increased uncertainty and chaos in how programs run.
Decreasing / Shifting Aid budgets	Medium Probability	Aid is a tiny portion of the overall US budget, making it an unlikely focus for the DOGE and other budget reduction efforts. However, there could be some administration advisors who see cutting foreign aid as a symbol.
Digital Development	Medium Probability	Digital development could have a unique selling point as it serves a number of the Trump team’s goals–like opportunities for private sector tech partnerships, better positioning against Chinese digital development.
Focus on economic development in aid	Medium Probability	The focus on improving economic opportunities in the US is a sure win, so we could see more attention to where international aid can bolster domestic businesses.
Ukraine + Gaza impacts on on funding	Medium Probability	It’s likely Ukraine will continue to be a focus, as will the conflict in the Middle East. What’s unclear is whether reaching a deal will mean an decrease in funding to programs serving these conflicts.
Election-inspired Giving	Low Probability	We will probably not see another “Trump bump” as happened in 2016.

 

Could Digital Public Infrastructure Be a Solution?

Again, this new Administration will bring change – positive or negative depending on your viewpoint.  For example, the Global Gag Rule may be seen by many as a step backwards in sexual and reproductive health.  Yet there are other constituencies that are celebrating this change.

In this theme of potential winning themes, one participant brought up Digital Public Infrastructure as a possible focus for Trump 2.0 investment.  DPI is a combination of networked open technology standards built for public interest, enabling governance systems, and multiple organizations working to drive public program innovations.

DPI could be a mind changer for the Trump 2.0 administration because it leverages proven public-private solutions in Estonia, India, and Ukraine for more effective and transparent government and private-sector services that counter malign PRC and Kremlin influences.

Silicon Valley technology companies can work with local technology companies to deliver these services to countries around thew world with support from USAID, DFC, MCC, and TDA – a win for everyone!

This post was created with support from Paige Creigh, Associate Director, Strategy, Global Giving