Trump's $400 Million Impact on Australia's International Strategy: 'Projects Are Unraveling'

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The reduction in foreign aid by the Trump administration has led to a $400 million impact on Australian projects, as reported by a leading humanitarian agencies’ body. This has caused organizations to cut essential tasks, leaving vulnerable groups without much-needed assistance.

Earlier this year, Conciliation Resources (CR), a group dedicated to fostering international peace, began a five-year initiative aimed at the Highlands of Papua New Guinea.

Unfortunately, Ciaran O’Toole, who leads CR’s Southeast Asia and the Pacific division, indicated that the project was suspended due to budget cuts by the United States Agency for International Development (USAID), resulting from a 90-day funding pause in January under President Donald Trump.

“Our principal efforts are directed at communities to build or reinforce their ability to avert violent conflict,” O’Toole stated.

However, “it was brought to an abrupt halt,” she added, when USAID decided to pull away.

USAID workers exit after major cuts by Trump Government image

The program’s goal was to prevent violence in an area where conflict is increasing. Last year, 49 people were killed in the Highlands region in what was considered a major escalation in tribal fighting.

“It’s not just reacting to when violence occurs. It’s not just crisis management. It is about trying to resolve what are the underlying causes of these conflicts,” O’Toole said.

“It is what not happens, right? It’s the headlines that don’t exist.”

But the plan to station mediators in PNG’s Hela province to assist communities in finding non-violent ways to address grievances came to an abrupt halt due to the funding pause earlier this year. Only 14 per cent of programs have had their funding reinstated since then.

CR was forced to let some staff go and reduce the hours of others.

“The true victims are the communities plagued by violence, and notably, the women enduring abuse, as well as those directly impacted by violence who find it hard to envision a brighter future,” O’Toole expressed. “My empathy lies with them.”

The program is one of more than 120 projects by Australian aid agencies impacted by the cuts, according to a report by the Australian Council for International Development (ACFID).

ACFID found that at least 124 programs run by Australian organisations were affected by the US funding cuts, worth at least $400 million, and 20 in-country offices for Australian-based aid organisations were closed as a result.

Jessica Mackenzie, ACFID policy and advocacy chief, said: “Just one agency had to let go of 200 local staff.”

“They would have been single-income families, so you can imagine the flow-on effects.”

ACFID believes the actual impact of the cuts to be greater than indicated by a survey, where less than half of its members responded.

A graph showing the value of USAID cuts on Australian-run programs by region.

The Trump administration’s funding cuts have resulted in a $400 million hit to Australian projects, according to ACFID. Source: SBS News

Australian-run programs in the Indo-Pacific region were hardest hit, with $113 million worth of funding lost in the Pacific, closely followed by $111 million in Southeast Asia.

But the impact for Australian agencies extends throughout Africa, the Middle East, and Asia.

The report found a specific program assisting 765,000 people in Yemen was discontinued.

“It was providing life-saving medicine. It was providing life-saving food, and it was providing malnutrition help for 26,000 children under the age of five,” Mackenzie said.

In Nepal, a program supporting over 300 girls in attending school was also axed, according to the report.

“That means that they’re more exposed to modern slavery, to human trafficking, to forced child marriage,” Mackenzie said. “The flow-on effects of these projects and their ability to break the cycle of poverty are really quite compounding.”

It is still unclear whether programs co-funded by both the Australian and US governments will proceed.

“When that US funding was stripped back, that whole project now comes into question,” Mackenzie said. “What I’m hearing, it’s very hard to say at this early stage, but a lot of these projects are falling away now.”

The council revealed that programs focusing on children, such as those pertaining to education, health, nutrition, and the prevention of child trafficking, were deeply affected as well.

A graph illustrating the types of Australian-run projects that have lost funding due to USAID cuts, with child-related ones highlighted at the top.

Child-related programs have been the most heavily impacted, according to figures.

The US government undertook a review during the initial 90-day pause to ensure only programs fully aligning with the president’s foreign policy were funded by USAID.

While aid organisations say they have been given little clarity by the administration as to why programs were cut, there is a belief that those focused on climate change and gender did not meet the administration’s expectations.

“I don’t think there was much thinking gone into it, to be quite honest,” O’Toole said.

“Anything that had the word gender in it. Anything, possibly, even with the words peace building, was eliminated, we believe, pretty quickly.

“There’s a lot of talk around peace from the administration. A desire to sign peace agreements to Nobel Prizes, but at the end of the day, peace starts in communities. It starts with people. It starts on the ground.”

Australia’s response to funding cuts

Labor reallocated $119 million of foreign aid from global health and education programs to the Indo-Pacific region in its pre-election budget in response to the USAID pause, but did not announce any additional spending.

After the election, Labor committed $10 million of additional aid to Gaza.

ACFID is calling for aid spending to be increased from 0.65 per cent to 1 per cent of the federal budget to help fill the gap left by the US cuts.

“Between 2005 and 2015, it was at 1 per cent,” Mackenzie said. “This isn’t a really big change.”

Since coming into power, Labor has increased its diplomatic and humanitarian efforts in the Pacific, with concerns about China’s influence in the region driving increased investment and aid programs.

Mackenzie said the government should prioritise funding health, education, and nutrition programs over initiatives with “geostrategic imperatives”.