This past year the Institute for Future Conflict partnered with the Front Range Consortium (FRC) to publish articles from their National Security Scholars Program (NSSP). This program was open to students at Colorado College, Colorado State University, CU Boulder, Denver University, the United States Air Force Academy, and University of Colorado-Colorado Springs.
We will be publishing several articles over the course of the month showcasing the results of the NSSP's research.
Since the Trump administration drastically cut the United States Agency for International Development’s (USAID) budget in 2025, China and Russia have been happy to step in to fill the void. USAID served a significant, widely understated function in the United States' national security policy, especially in shoring up US soft power defense against its adversaries. While a freeze on aid commitments has the potential to save us dollars at home, it comes at the cost of the United States' ability to shape events to its advantage through dollar diplomacy, preempt military problems, and prevent rising adversarial powers like Russia and China from exploiting gaps in US partnerships. With ongoing efforts by China to pull countries into its sphere of economic influence and Russia’s interference in strategically significant regions, the US would be ill-advised to continue chiseling away at a core pillar of its soft power.
On January 20, 2025, President Trump issued an executive order freezing USAID operations for 90 days. Two weeks later, the administration published a press release decrying the massive amounts of waste, abuse, and fraud present within USAID, pointing to DEI-related programs as the site of a malicious abuse of taxpayer dollars. These claims by the administration have been found to be largely misleading. Despite this, the organization was downsized in June of 2025 and absorbed by the State Department.
The United States is the largest foreign aid donor in the world. In 2023, the United States gave $72 billion, primarily in health and humanitarian assistance to regions affected by conflict and natural disasters. These funds were dispensed through USAID, established in 1961 to combat disease, assist with economic development, promote democracy, and address humanitarian crises abroad. The logic underpinning USAID was that by addressing the root of national security problems overseas—providing governance aid to stabilize countries with turbulent political systems; health aid to ensure a country’s ability to fight disease—the United States could protect its interests without having to resort to paying the steep financial and human costs of military action. USAID also served as a key player in the United State's strategy of dollar diplomacy, the use of aid and overseas investments as a tool for building relationships. The loss of USAID undermines United States' ability to achieve its foreign policy goals and support alliances with economic statecraft instead of military action. China and Russia have now pounced on this opportunity in the aftermath of USAID’s closure.
China Steps into the Vacuum
On February 13, 2025, former USAID Administrator Andrew Natsios testified in front of the House Committee on Foreign Affairs that the shutdown of USAID missions “damages our ability to conduct diplomacy in countries of the developing world, who will now turn to China and Russia for foreign aid.” According to the Council on Foreign Relations, this shift is already underway. Cambodia pivoted quickly to China following the cessation of USAID missions. Nepal, a strategically significant region for the US military, also looked to fill the aid gap with support from China.
Before the freeze, USAID acted as a strategic counterweight against China’s own international development program: the Belt and Road Initiative. Without USAID to offer a viable alternative to countries seeking development aid, China can increase its economic power in strategically important regions by offering predatory loans to aid-recipient nations. Being indebted to China—sometimes to the tune of up to 20% of a country’s GDP, as in the case of Cambodia—has transformed multiple countries around the world into “vassal states” for Beijing.
For example, in 2021, Cambodia rescinded a request for funding to the US Department of Defense and tapped China to fund the refurbishment of Cambodia’s Ream Naval Base. Chinese funding supported the construction of multiple new facilities. Since 2024, China has enjoyed “extended and exclusive access” to new piers and dry-docks, according to reporting and imaging from the Asia Maritime Transparency Initiative. While Cambodia denies that China holds privileged access to parts of Ream, continued Chinese presence at the base has raised concerns about the permanence and size of China’s military presence in Cambodia.
When China uses dollar diplomacy to enrich its own military presence abroad, it does so quietly. Aid-recipient countries find themselves in a position where development means granting China exclusive access or conceding to China’s strategic plans in the area.
China also takes an active role in shaping international opinion, as is best seen in the case of Taiwan. Between 2022 and 2024, USAID partnered with Taiwan’s International Cooperation and Development Fund on multiple projects to help Taiwan strengthen its diplomatic relationships. USAID’s absence provides an opening for China to lure Taiwan’s aid-recipient allies into rethinking their stance on Taiwan’s sovereignty. According to Georgetown professor Y. Tony Yang, “Developing nations that might have previously resisted Beijing’s overtures due to United States' support may now have little choice but to accept China’s terms.” By alienating Taiwan from its partners, China increases the pressure on Taiwan to pursue reunification, an act that would endanger United States' access to the global supply chain of semiconductors and the balance of power in the region, giving China a technological and military edge. Without USAID, China has the potential to initiate a seismic diplomatic shift in the balance of power in the Taiwan Strait. Foreign aid has thus far served as a deterrent against this possibility.
Curbing Russian Corruption
In Moldova, USAID projects have allowed the United States to curb Russian meddling in the country’s parliamentary elections. Through USAID’s Inclusive and Participatory Processes Project, Moldova was able to strengthen and defend its democracy against Russian disinformation campaigns. The project was halted in 2025.
Moldova’s strategic positioning between NATO members and the EU have made it a target. Russia has launched extensive disinformation efforts to deprive Moldova’s pro-EU party of a parliamentary majority in hopes that it can block Moldova from joining the EU and cooperating with Romania, soon-to-be home of NATO’s largest base. Vote-buying, information warfare, and cyberattacks make up the Russian playbook to destabilize democracy in Moldova, according to the Atlantic Council. Russia’s plan to halt strategic cooperation between Moldova and Romania would jeopardize NATO’s ability to defend the region in the event of a Russian offensive. USAID assistance allowed Moldova to combat Russian corruption through the development of independent media outlets and election-monitoring trainings.
In Ukraine, Russia’s vehement opposition to NATO expansion has produced a prolonged war. Russia’s pattern of destabilizing EU and NATO prospectives before escalating to full-scale war “suggests that Moldova is on the verge of experiencing significant geopolitical challenges as one of Russia’s strategic targets,” according to the Center for Eurasian, Russian and East European Studies.
Currently, Putin’s biggest objectives are to reduce international aid to Ukraine and to undermine the EU and NATO. Without USAID, the targets of Russian imperial policy are left vulnerable to corruption, and, if Ukraine is any indication, the possibility of another war the United States might find itself funneling resources toward.
The Dollar Diplomacy Dilemma
The dilemma with dollar diplomacy is its requirement of dollars—a lot of them. Large expenditures overseas, reaching into the hundreds of millions, have historically been a hard sell to American taxpayers. Foreign aid is a long-term investment, and the benefits of such an investment may only become clear decades later. In short, the primary criticism of USAID was that its cost never matched the benefit.
USAID had a clear perception problem. In 2024, USAID spending made up less than 1% of the federal budget, roughly $32 billion out of $6.5 trillion. However, USAID was never able to overcome the label of bloated bureaucracy. Brookings found that in 2024, Americans believed that foreign aid made up 25% of the federal budget. The total cost of USAID and the goals of its missions have been exaggerated by American leaders. These narratives stuck, acting as the unfortunate impetus for USAID’s dissolution in 2025.
The primary forms of aid dispensed by USAID—strategic and humanitarian—are behind such massive successes as the US President’s Emergency Plan for AIDS Relief (PEPFAR), malaria relief, and global vaccine distribution, initiatives estimated to have saved millions of lives. Economic development aid paved the way for friendly, reciprocal economic relations with South Korea. Thanks in part to the United States' development assistance, South Korea now serves as a key trading and defense partner to the United States in Asia. Both humanitarian and strategic aid ensure that when the United States enters a conflict, it does so with allies and partners.
Contrary to popular viewpoints, USAID’s efforts have produced visible strategic benefits to the US. However, part of reviving foreign assistance projects will mean solving the perception problem, which requires a more transparent approach to how aid is justified to Americans.
Building Back the United States' Soft Power
In the absence of USAID, China and Russia have both the interest and the capacity to step in where the United States has closed up shop. The loss of USAID deprives policymakers of options, enriches adversaries, and can lead to more instability, consequences that spell trouble for Taiwan’s resistance against Chinese takeover and Moldova’s partnership with the EU.
If the United States removes USAID as a tool from its policy toolbox, it increases the likelihood of turning to the military as a hammer to solve its problems. In an era of great power competition and proxy-war conflict, the United States will need options and allies—neither of which can be purchased overnight with a simple presidential change. The only way to combat the erosion of US soft power against adversaries with grand strategies stretching the course of hundred-year periods is to recognize the value of forward-looking strategic planning. A renewed focus on foreign assistance must be carried out with the recognition that foreign aid is an investment in the future of American power.
Ava Knox is an undergraduate political science student at the University of Colorado, Colorado Springs.
The views expressed are those of the author and do not reflect the official policy or position of the US Air Force, Defense Department, or the US government.