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Since his inauguration on Jan 20, US President Donald Trump has issued more than 300 executive orders, significantly impacting both the United States and countries around the world. His orders on foreign aid, illegal immigration, environmental regulations, gender policies and abortion rights are expected to have direct repercussions for Nepal. In response, Nepal’s Ministry of Foreign Affairs has directed its embassy in Washington to closely monitor these developments and identify areas of concern.

Following Trump’s executive orders, the United States Agency for International Development (USAID) and the American Embassy in Kathmandu have paused all activities, including small-scale projects. Consequently, non-governmental organizations (NGOs) operating with USAID funding have been forced to suspend their work for the past three months, potentially affecting Nepal’s health, education and humanitarian sectors. However, the Nepal government has yet to issue an official response. Meanwhile, the US State Department is conducting a review of all foreign aid programs to ensure alignment with the administration’s “America First” policy.

In addition to foreign aid restrictions, the Trump administration has launched a nationwide immigration crackdown, leading to the arrest of over 1,000 individuals, according to Immigration and Customs Enforcement (ICE). These arrests include individuals without prior criminal records. White House Press Secretary Karoline Leavitt stated that while criminal offenders remain the top priority, all undocumented immigrants are subject to enforcement. Preliminary reports indicate that ICE has already detained some Nepali immigrants, including students working beyond their permitted hours.

According to ICE, approximately 1,400 Nepalis are residing illegally in the US and may face deportation. The Trump administration has reiterated that it is each country’s responsibility to repatriate its undocumented citizens. However, Nepali officials have remained silent on whether they have received a formal request from the US government regarding deportations. Some Nepali students are reportedly experiencing difficulties due to these new restrictions.

Despite reports of Nepali nationals being detained, Nepal’s embassy in Washington has not issued a statement. Meanwhile, US Ambassador to Nepal Dean R Thompson recently met with Foreign Minister Arzu Rana Deuba to discuss bilateral matters, though neither side has disclosed details of their conversation. A senior official at the Foreign Ministry stated that the government cannot publicly comment on US immigration policy, as it is their internal matter. However, Nepal’s agencies should take steps to support affected citizens.

Regarding US aid, USAID has halted its programs, though the implications for the Millennium Challenge Corporation (MCC) remain uncertain. While MCC is not directly tied to USAID, its activities may also be affected. However, given bipartisan support for the MCC, the initiative is expected to continue. Nepal and the US signed the MCC compact in 2017 during Trump’s first term. Additionally, Trump’s decision to withdraw from the Paris Climate Agreement could have some impact on Nepal. The administration, however, has stated its commitment to “sensible environmental protections” while prioritizing national interests.

A senior official at the Ministry of Finance commented: “Although Nepal may not face a direct cut in US aid, certain projects that do not align with Trump’s policies could be discontinued.” The official clarified that a temporary pause in assistance does not necessarily indicate an overall reduction in US support. Observers suggest that Nepal should engage in diplomatic negotiations to ensure continued US support, particularly for critical sectors.

The Trump administration is still in the process of making key appointments at the State Department, following the dismissal of numerous senior officials appointed by the Biden administration. The administration is expected to introduce new policies, including an aggressive stance toward China and further developments in the Indo-Pacific Strategy (IPS). Nepali policymakers must remain vigilant and adaptable to these changes. Some officials suggest that dealing with Trump’s administration could be more challenging than engaging with Biden’s.

Under the Biden administration, US assistance and investment in Nepal increased significantly, with high-level engagements and diplomatic visits. Nepal now faces the challenge of maintaining this momentum through negotiations with the Trump administration, given its need for continued support. Over the past four years, US-Nepal relations have strengthened through extensive diplomatic efforts, including the implementation of the MCC project, a priority for the Biden administration.

The Trump administration also engaged with Nepal during its previous tenure. In 2018, then-Foreign Minister Pradeep Gyawali visited the US for bilateral discussions—the first such visit in years. However, the visit sparked controversy in Nepal when the US State Department suggested that Nepal could play a central role in the Indo-Pacific region. More recently, in 2023, Foreign Minister NP Saud paid an official visit to the US to discuss a broad range of bilateral issues.

After the April 2015 earthquake in Nepal, India committed $250m in grant assistance for post-earthquake reconstruction in Nepal, the Embassy of India in Kathmandu said on Monday. “The grant was allocated in four different sectors—Housing ($100m), Education ($50m), Health ($50m) and Cultural Heritage ($50m). A JPMC (Joint Project Monitoring Committee) mechanism was set up in Aug 2017 to monitor the progress of these projects,” the statement added.

India and Nepal held the fifth meeting of the JPMC on post-earthquake reconstruction projects on Monday in Kathmandu. The Indian delegation was led by Munu Mahawar, Additional Secretary (North), Ministry of External Affairs, Government of India and the Nepalese delegation was led by Padma Kumar Mainalee, Joint Secretary, Ministry of Urban Development, Government of Nepal.

The meeting was also attended by several other representatives of the Governments of India and Nepal, consultants and other stakeholders engaged in implementation of the projects.

The meeting carried out a comprehensive review of the progress of the Government of India assisted post-earthquake reconstruction projects in housing, education, health and cultural heritage sectors in Nepal. It acknowledged the successful completion of the projects agreed under the housing sector in 2021 and the education sector in 2024.

According to the Embassy of India, Kathmandu, in health and cultural heritage sectors, both sides expressed satisfaction on the progress achieved and agreed to expedite the early completion of projects under these sectors.

Since the last JPMC meeting in Oct 2023, Government of India has handed over 26 projects in the education sector including Tribhuvan University Central Library in Kathmandu, 32 projects in the health sector and three projects in the cultural heritage sector, amounting to Rs 3.35bn.

In addition, 43 projects in the health sector and nine projects in the cultural heritage sector amounting to Rs 1.73bn have been completed during this period, as per the Embassy of India Kathmandu.

Both sides appreciated the positive socio-economic impact of the reconstruction projects, particularly in employment generation and extension of health and education facilities in remote areas.

AS (North) also visited the Gusthal Mahavihar reconstruction project, a cultural heritage site located in Guita Tole, Lalitpur Metropolitan City-8. During the visit, he reviewed the project’s progress and engaged with members of the user community.

Both sides agreed to hold the next meeting of the JPMC on a mutually convenient date.

The Donald Trump administration’s decision to freeze all foreign aid has begun to show its effects in Nepal. US Secretary of State Marco Rubio issued an internal memo to all relevant agencies and diplomatic missions, announcing the suspension of foreign aid with exceptions only for emergency food assistance and military funding for Israel and Egypt.

In Nepal, USAID and its implementing partners have temporarily halted numerous ongoing projects. Pre-scheduled visits from US officials to Nepal have also been canceled. Organizations working with USAID now face an uncertain future, with no clarity on the fate of previously signed projects. Officials indicate that all activities will remain suspended for the next three months, adding to the ambiguity surrounding existing programs.

USAID has been Nepal’s largest donor in sectors such as health, education, agriculture and food security, water and sanitation, energy, environment and humanitarian assistance. Organizations collaborating with USAID were reluctant to comment on the impact of the freeze but acknowledged they were rushing to communicate with stakeholders about the decision.

The memo seen by Agence France-Presse (AFP) explicitly states, “No new funds shall be obligated for new awards or the extension of existing awards until each proposed new award or extension has been reviewed and approved.” This directive effectively pauses US funding for critical initiatives like PEPFAR, an anti-HIV/AIDS program launched under President George W Bush in 2003. PEPFAR, which has saved an estimated 26m lives, primarily in developing countries, is now facing uncertainty. The memo permits exceptions on a case-by-case basis and allows temporary funding for salaries and administrative expenses during this period.

The freeze comes with an 85-day timeline for an internal review of all foreign assistance. Rubio justified the decision by stating that it was necessary for the new administration to ensure foreign aid commitments were not duplicated, were effective and aligned with President Trump’s foreign policy priorities. Rubio, once a proponent of development assistance, noted the need for greater oversight.

The US has long been the largest donor in dollar terms, providing more than $64bn in overseas development assistance in 2023, according to the Organization for Economic Cooperation and Development. However, the Trump administration’s approach marks a significant departure from bipartisan support for foreign aid in Washington.

On his first day in office, Trump signed an executive order suspending foreign assistance for 90 days. Anti-poverty organization Oxfam criticized this move, calling it a drastic shift from a longstanding US consensus on foreign aid. “Humanitarian and development assistance accounts for only around one percent of the federal budget; it saves lives, fights diseases, educates millions of children and reduces poverty,” said Oxfam America President Abby Maxman. She warned that cutting these programs could have severe “life or death consequences.”

Trump’s decision to withdraw from the Paris Climate Accord and the World Health Organization further compounds potential challenges for countries like Nepal, where foreign aid plays a vital role in addressing critical issues.

In May 2022, the Nepal government and USAID signed a five-year assistance agreement worth $658m. The grant aimed to strengthen democratic governance, promote enterprise-driven economic growth, and build resilience in communities most vulnerable to natural disasters and climate change. This partnership highlighted the long-standing collaboration between the US and Nepal in addressing developmental and environmental challenges.

However, the recent freeze has cast doubt on the continuation of such initiatives. USAID operations in neighboring countries like Bangladesh have also come to a halt, citing the executive order. The suspension of foreign assistance underscores the Trump administration’s shifting priorities and its potential repercussions for vulnerable nations like Nepal.

As the freeze unfolds, the implications for Nepal’s development, public health and disaster resilience remain uncertain. The situation demands close monitoring, as delays in funding and project implementation could disrupt critical progress across multiple sectors.

As in his first tenure (2017–2021), US President Donald Trump has signaled his intention to adopt an aggressive Indo-Pacific Strategy (IPS) to counter China's growing influence in the region. While his administration’s exact approach remains to be seen, Trump’s actions thus far suggest a more unilateral and hardline strategy compared to his predecessor, Joe Biden, who focused on fostering partnerships and multilateral cooperation in the region.

A key question is whether Trump will continue Biden’s approach of strengthening ties with allies and regional partners or pivot to a more isolated stance, prioritizing direct US action. Another point of uncertainty is whether his administration will focus on a military-centric strategy or emphasize economic engagement with countries in the Indo-Pacific. But one thing appears certain: the Trump administration's IPS strategy is likely to adopt a more confrontational tone. This approach could aggravate not only Beijing but also some US partners in the region.

Shortly after taking office, US Secretary of State Marco Rubio held a high-profile meeting with foreign ministers from Australia, India and Japan—the member nations of the Quadrilateral Security Dialogue or "Quad." A statement from the US State Department emphasized the group's shared commitment to a “"Free and Open Indo-Pacific,” where democratic values, rule of law, sovereignty, and territorial integrity are upheld.

The statement underscored the Quad's collective stance against unilateral actions that attempt to alter the regional status quo through coercion or force. “Our four nations maintain our conviction that international law, economic opportunity, peace, stability, and security—especially in the maritime domain—are essential for the prosperity of the Indo-Pacific region," the statement declared. It also highlighted commitments to strengthening regional maritime, economic, and technological security in response to rising threats, while promoting reliable and resilient supply chains. India, as the next host of the Quad Leaders' Summit, is set to play a pivotal role in steering the group's agenda.

China has criticized the Quad, labeling it as an attempt to encircle Beijing and undermine its strategic interests. China's opposition to the Quad's initiatives could escalate tensions in the region, especially as the Trump administration doubles down on its Indo-Pacific focus.

The Indo-Pacific Strategy introduced by the Biden administration in 2022 emphasized collaboration with India and other regional groupings to promote stability in South Asia. During Biden's tenure, India-US relations saw a significant deepening of their strategic partnership. However, Trump's return to power could strain this partnership, particularly due to his hardline stance on tariffs and trade. Trump has already suggested the possibility of imposing a 100 percent tariff on imports from BRICS nations, including India—a move that could severely impact the trade relationship between Washington and New Delhi.

Trump's approach to China is also likely to exacerbate existing tensions. Having already initiated a trade war with Beijing during his first term, Trump has signaled his intent to escalate economic pressure on China. In a recent press conference, he hinted at imposing a 10 percent across-the-board tariff on all Chinese goods as early as Feb 1. Such a move would likely lead to further deterioration in US-China relations, with significant ramifications for the global economy.

Beyond trade, Trump’s previous decisions—such as withdrawing from the Paris Climate Accord and the World Health Organization—have raised concerns about the US’ role in addressing global challenges. These moves could undermine US credibility and influence in the Indo-Pacific, where collaborative efforts on climate change, public health, and sustainable development are crucial.

Despite these challenges, Trump is expected to continue working with India to counter China's influence in the region. Reviving talks with North Korea, a hallmark of his first term, may also resurface as a diplomatic priority. However, Trump’s stance on Taiwan, a critical flashpoint in US-China relations, remains uncertain.

Nepal, a strategically located country in South Asia, is unlikely to remain unaffected by these geopolitical shifts. Nepal’s relations with both India and China are integral to its foreign policy, and any significant changes in US strategy toward these powers will have a ripple effect on Kathmandu's diplomatic calculus. For instance, further deterioration in US-China relations could constrain Nepal's ability to navigate its relationships with both nations.

Additionally, Trump's policies on global issues such as climate change, health and minority rights are likely to impact Nepal directly. The country, which is already grappling with the challenges of climate change, relies on international cooperation and funding to implement mitigation and adaptation strategies. A more isolationist US approach could hinder Nepal’s efforts in these areas. Changes in US funding or support for health services and rights related to sexual and gender minorities could also have social and economic repercussions.

As Trump’s administration takes shape, it will be crucial to monitor how his Indo-Pacific Strategy evolves and its implications for the region and beyond.