US Secretary of State Marco Rubio has said that the United States was cancelling 83 percent of programs at USAID, as the Trump administration guts spending not aligned with its “America First” agenda.
In Nepal too, hundreds of projects launched under the USAID have faced closure. At the same time, the future of a $500m grant under the Millennium Challenge Corporation (MCC) hangs in the balance as the US is yet to make a decision about it. The USAID aid cut has significantly hit various sectors in Nepal such as health and education, human rights and gender. Following the USAID cut, the Nepal government is approaching India, China and other countries to fill the gap. Senior officials at the Ministry of Finance are exploring ways to prevent the possible impact on Nepal’s critical areas such as health, education, agriculture and support for minority groups.
The USAID distributes humanitarian aid around the world, with health and emergency programs in around 120 countries, and critics warn that any major downsizing of its operations will affect millions of people. “After a six week review, we are officially cancelling 83 percent of the programs at USAID,” Rubio said on social media platform X. “The 5,200 contracts that are now cancelled spent tens of billions of dollars in ways that did not serve, (and in some cases even harmed), the core national interests of the United States.”
US President Donald Trump, who has called for the agency to be shut down, signed an executive order in January demanding a freeze on all US foreign aid to allow time to assess overseas expenses. Rubio said the remaining 1,000 programs would be administered by the State Department, delivering a seemingly fatal blow to USAID—where most workers have been placed on leave or fired since January.
Notably, Rubio on Monday thanked the Department of Government Efficiency (DOGE), which billionaire Elon Musk is leading in a drive to cut federal spending and jobs. Musk, whom Rubio has reportedly criticized over his aggressive belt-tightening, responded on X describing the USAID cuts as “tough, but necessary.”
The State Department had announced last month its intention to cut 92 percent of USAID contracts, identifying 5,800 grants to be eliminated. Trump and his allies have argued that foreign assistance is wasteful and does not serve US interests, but aid groups argue much of the assistance supports US interests by promoting stability and health overseas.
