What is USAID and why does Donald Trump want to end it?

The future of the US government’s main overseas aid agency has been cast into doubt as the Trump administration plans to merge it with the US Department of State after days of upheaval.

The United States Agency for International Development (USAID) would continue its function as an aid agency, but the plan involves a significant reduction in its funding and the workforce, CBS News, the BBC’s US partner, reports.

On Monday, Secretary of State Marco Rubio accused USAID’s leadership of “insubordination” and said he was now its “acting head”.

US President Donald Trump and one of his top advisers, billionaire Elon Musk, have been strongly critical of the agency.

But the move to shut it down could have a profound impact on humanitarian programmes around the world.

The United States Agency for International Development (USAID) was set up in the early 1960s to administer humanitarian aid programmes on behalf of the US government around the world.

It employs around 10,000 people, two-thirds of whom work overseas. It has bases in more than 60 countries and works in dozens of others. However, most of the work on the ground is carried out by other organisations that are contracted and funded by USAID.

The range of activities it undertakes is vast. For example, not only does USAID provide food in countries where people are starving, it also operates the world’s gold standard famine detection system, which uses data analysis to try to predict where shortages are emerging.

Much of USAID’s budget is spent on health programmes, such as offering polio vaccinations in countries where the disease still circulates and helping to stop the spread of viruses which have the potential to cause a pandemic.

The BBC’s international charity BBC Media Action, which is funded by external grants and voluntary contributions, receives some funding from USAID. According to a 2024 report, USAID donated $3.23m (£2.6m), making it the charity’s second-largest donor that financial year.

According to government data, the US spent $68bn (£55bn) on international aid in 2023.

That total is spread across several departments and agencies, but USAID’s budget constitutes more than half of it at around $40bn.

The vast majority of that money is spent in Asia, sub-Saharan Africa and Europe – primarily on humanitarian efforts in Ukraine.

The US is the world’s biggest spender on international development – and by some margin.

To put it into context, the UK is the world’s fourth-largest aid spender. In 2023, it spent £15.3bn – around a quarter of what the US provided.

Trump is a long-term critic of overseas spending and has said it does not represent value for money for American taxpayers. He has singled out USAID for particularly strong criticism, describing senior officials there as “radical lunatics”.

Abolishing the agency would likely enjoy popular support. Opinion polls have long suggested that American voters favour slashing foreign aid spending. According to the Chicago Council on Global Affairs, polling data going back to the 1970s has indicated broad support for cuts.

One of Trump’s first actions after returning to office was signing an executive order pausing almost all international spending for 90 days while a review could be carried out.

A memo was then issued by the State Department which halted the vast majority of work being done on the ground. Waivers were later issued for humanitarian programmes, but the announcement upended the world of international development and caused widespread disruption to services.

Programmes including those providing medication to the world’s poorest and installing clean water supplies had to stop overnight. One veteran humanitarian worker told the BBC the pause was “like an earthquake across the aid sector”.

Tensions between the White House and USAID escalated over the weekend when officials working for Elon Musk – who Trump has tasked with identifying spending cuts in the federal budget – were reportedly denied access to secure financial data at USAID headquarters. Two senior security officials there were placed on leave in the aftermath, according to reports.

On Monday, Musk – who was speaking in a public conversation on X, the social media platform he owns – said: “With regards to the USAID stuff, I went over it with [the president] in detail and he agreed that we should shut it down.”

USAID’s website has gone offline and employees were told to stay at home on Monday – though it remains unclear precisely what the White House’s next move will be.

Later on Monday, Secretary of State Marco Rubio accused USAID’s leadership of “insubordination” and said he was now its “acting head”. He added that “a lot of functions” carried out by the agency would continue but that spending “has to be in alignment with the national interest”.

While it is clear the White House wields significant influence over USAID, that power is theoretically limited.

USAID came into being after Congress passed the Foreign Assistance Act in 1961. That law mandated for a government agency to be set up and tasked with administering overseas spending.

Shortly after, then-President John F Kennedy set up USAID using an executive order. Another law was passed in 1998 which confirmed USAID’s status as an executive agency in its own right.

In short, that means Trump cannot necessarily simply abolish USAID by signing an executive order, and any attempt to do so would almost certainly face strong challenges in the courts and Congress.

Closing USAID altogether would likely require an act of Congress – where Trump’s Republican Party holds slim majorities in both houses.

One of the options reportedly being considered by the Trump administration is effectively making USAID a branch of the State Department, as opposed to it being a government agency in its own right.

That type of arrangement would not be completely unheard of: in 2020, then UK Prime Minister Boris Johnson merged the Department for International Development with the Foreign Office.

Ministers said at the time that it would ensure international spending supported the government’s wider foreign policy goals – but critics warned it would reduce expertise in the aid sector and damage the UK’s overseas standing and influence.

Given the disproportionate amount of funding which comes from the US, any changes to how that money is spent will doubtless be felt around the world.

USAID’s activities range from providing prosthetic limbs to soldiers injured in Ukraine, to clearing landmines and containing the spread of Ebola in Africa. The effects could be truly global.

After the 90-day overseas spending freeze was announced, Secretary of State Marco Rubio said “every dollar” must be “justified” by evidence that it makes the US safer, stronger and more prosperous.

It remains to be seen which parts of USAID’s work meet those criteria as far as the White House is concerned.

Trump has made it clear he wants overseas spending to be closely aligned with his “America First” approach and the international development sector is braced for more shockwaves.

There are also questions about how much the US will spend overseas in years to come, as Musk – empowered by Trump – attempts to cut billions from the government’s budget.