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United States Global Development: Aid Cuts, Tax Secrecy, and Climate Retreat
The United States remains the world’s most powerful development actor. However, its foreign policy changed more in 2025 than in the past six decades combined. Aid, tax, and climate policy all shifted at once. This article explains what happened, why it matters, and what it means for the Sustainable Development Goals.
From USAID to Dismantlement
The US Agency for International Development launched in 1961 under President Kennedy. For 64 years, USAID led American development work in over 100 countries. It focused on health, education, food security, and governance.
In January 2025, the new Trump administration froze foreign aid within days of taking office. By March 2025, the administration had terminated 83% of USAID’s programs. USAID formally closed in July 2025, with remnants folded into the State Department.
Congress then passed rescission packages in July and October 2025. These cancelled $7.9 billion in already-appropriated foreign aid. Funding for the UN Population Fund ended completely. The US also withdrew formally from the World Health Organization.
The 2025 ODA Numbers: A Historic Collapse
The OECD’s Development Assistance Committee tracks official development assistance, or ODA, across major donor countries. Its preliminary 2025 figures show the scale of change clearly.
US ODA fell to $29.0 billion in 2025, down 56.9% from 2024. This is the largest single-year cut by any donor in ODA history. The US alone caused about three-quarters of the entire $50 billion global ODA decline in 2025.
For the first time since 2003, the US lost its position as the world’s top ODA donor. Germany took first place, at $29.1 billion, only marginally ahead of the US. Global ODA overall fell 23.1% in 2025, the steepest drop ever recorded.
US cuts to multilateral organizations were even sharper. Washington cut its core UN contributions by 87.2%, the main driver behind a record 27% fall in UN core funding worldwide. Bilateral aid to Ukraine dropped 91.1% in real terms.
Impact on Women’s Organizations and NGOs
These cuts hit women-led organizations especially hard. A UN Women survey of 411 organizations across 44 crisis-affected countries, conducted in March 2025, found alarming results. Ninety percent reported financial harm, and nearly half expected to close within six months.
Separately, an analysis of terminated USAID and State Department grants found nearly $400 million in gender-based violence funding cut since January 2025. Most surviving humanitarian waivers explicitly excluded gender-related programs.
Across the wider NGO sector, at least 81 organizations closed at least one office by April 2025. Many laid off staff or cut pay to survive. Health researchers estimate USAID’s dismantling could cause over 14 million additional deaths by 2030, including 4.5 million children under five.
Congress Pushes Back, Partially
By late 2025, bipartisan resistance grew inside Congress itself. On February 3, 2026, President Trump signed the FY2026 National Security, Department of State, and Related Programs Act. It restored significant funding the administration wanted cut.
The bill allocates $50 billion for global diplomacy and foreign assistance in 2026. This is still 16% below 2025 levels. Yet it is nearly 60% more than the administration’s original request.
Global health funding held steady at $9.4 billion, close to 2025 levels. PEPFAR received $4.6 billion, alongside continued support for the Global Fund and Gavi. Congress also restored $1.4 billion in food assistance and preserved democracy and human rights programs.
Still, traditional development accounts were consolidated and cut by 21%. Humanitarian assistance absorbed the heaviest reductions of all major categories. Analysts describe the new approach as merging development policy with national security priorities.
Tax Policy Contradictions Worsen
America’s tax policies continue to undermine development efforts abroad. This contradiction sits at the heart of US global development policy. Washington funds aid programs while its own financial system enables tax avoidance elsewhere.
The Tax Justice Network’s 2025 Financial Secrecy Index ranks the United States first among 141 jurisdictions worldwide. This is the top spot for enabling global financial secrecy, ahead of Switzerland and Singapore. The US also ranks first on the related Corporate Tax Haven Index.
The US earned this ranking through weak beneficial ownership disclosure and limited international information sharing. It refuses to share non-resident account data with foreign tax authorities. Researchers estimate lax US trust laws cost other countries nearly $20 billion yearly in lost tax revenue.
This pattern echoes across RYB’s other country pages. The Netherlands’ poor Spillover Index score also reflects corporate tax haven status. Wealthy nations often combine aid budgets with financial systems that quietly drain revenue from developing countries.
For developing countries, this matters enormously. Corporate tax abuse and illicit financial flows deny governments revenue needed for schools, hospitals, and infrastructure. Ending financial secrecy would likely help development far more than any single aid program.
Climate Action Abandoned
American development rhetoric no longer emphasizes climate resilience. On January 20, 2025, President Trump signed an executive order withdrawing the US from the Paris Agreement. This is the second US withdrawal from the accord in eight years.
The withdrawal took full legal effect on January 27, 2026. The US now stands alongside Iran, Libya, and Yemen as the only nations outside the agreement. Trump also revoked the US International Climate Finance Plan, ending climate funding for developing countries.
Domestic environmental protections were reversed simultaneously. The administration rolled back air quality standards, wastewater rules, and power plant emissions limits. It also paused new wind energy leases and eased offshore drilling restrictions.
The US further withdrew from the Loss and Damage Fund board, which helps vulnerable countries recover from climate disasters. It abandoned the Just Energy Transition Partnership, a program helping developing nations move away from coal. For the first time, no US delegation attended the COP30 climate talks in Brazil.
Analysts project these policies could push US emissions up to 36% higher than expected by 2035. Since developing countries face the earliest and harshest climate impacts, this retreat carries global consequences far beyond US borders.
Still, climate action continues below the federal level. States, cities, and businesses maintain emissions targets through coalitions like America Is All In. California, in particular, continues to enforce its own climate and cap-and-trade rules despite federal opposition.
Trade Policy and Tariffs
US tariff policy shifted dramatically alongside aid and climate policy. In April 2025, the US imposed a universal 10% tariff on all imports. Country-specific tariffs pushed average US rates from 2.8% before 2025 to over 20% by September.
Sixteen developing countries, including several least-developed nations, now face tariffs above 25%. Preferential US trade arrangements for the poorest countries expired on September 30, 2025. Tariffs on agricultural exports from least-developed countries rose more than 14 percentage points.
This connects directly to global development. Trade, not aid, remains the largest source of income for most developing economies. When tariffs rise, poor countries lose export revenue precisely as aid budgets shrink too.
The UN Trade and Development agency warns smaller, less diversified economies face the greatest exposure. Countries like Bangladesh and Lesotho are now seeking alternative markets in Europe to offset US losses. Combined with falling ODA, this represents a broader US retreat from its traditional development role.
What America Still Contributes
Despite these shifts, US global development engagement has not disappeared entirely. Congress restored meaningful funding for global health, food security, and democracy programs in 2026. PEPFAR alone still supports HIV treatment for millions of people worldwide.
The US Development Finance Corporation retains authority to issue vast sums in loans and equity investments to developing countries. In June 2026, the US announced over $1 billion in new humanitarian funding through the UN’s emergency response system.
Subnational climate leadership also continues to matter. California maintains one of the world’s most ambitious state-level climate programs. It also recently strengthened its own corporate tax transparency rules, pushing back against federal secrecy trends.
These efforts show US global development engagement has narrowed, not vanished completely. Its future shape will depend heavily on future elections and shifting congressional priorities.
How This Connects to the SDGs
ODA, tax policy, climate action, and trade all directly shape SDG progress worldwide. Reduced health aid threatens SDG 3, on good health and well-being. Falling education funding undermines SDG 4, on quality education.
Cuts to women’s programs weaken SDG 5, on gender equality. Financial secrecy and tax avoidance drain resources needed for SDG 1, ending poverty, and SDG 10, reducing inequality. Climate retreat undermines SDG 13, climate action, directly.
SDG 17, on global partnerships, captures this whole picture best. It measures whether wealthy nations meet aid commitments, curb harmful financial flows, and cooperate multilaterally. The 2026 Sustainable Development Report shows the US SDG Index ranking fell five places this year.
The same report ranks the US last among all nations on support for UN-based multilateralism. In 2025, the US voted with the international majority in just 5% of UN General Assembly votes. In January 2026, it withdrew from more than 60 international organizations.
Because these policies touch nearly every sector, their combined effect ripples across almost all seventeen goals at once. This is why RYB tracks ODA, tax, climate, and trade together, not as separate stories.
A Pattern, Not an Isolated Case
The US did not act alone on ODA cuts. In 2024, the US, Germany, France, and the UK all cut ODA in the same year. This was the first time this happened in nearly 30 years.
However, the US 2025 cut was uniquely severe compared to these peers. Germany’s ODA fell a comparatively modest 17%, France’s by 11%, and the UK’s by 11%. The US cut was more than three times deeper than any of them.
Political change can also reverse this trend elsewhere. The Netherlands’ previous government cut its development budget sharply from 2024 onward. Yet a new Dutch coalition, formed in early 2026, is now reinvesting in humanitarian aid, women’s rights, and civil society funding.
This shows ODA, tax, and climate policy are political choices, not fixed facts. They shift with elections, coalitions, and budget priorities. RYB will track this pattern across its country pages going forward.
Looking Forward
America’s development role has not disappeared, but it has fundamentally narrowed. Aid increasingly serves security and geopolitical goals rather than poverty reduction alone. Whether this approach still delivers meaningful development outcomes remains deeply contested.
Congress has shown it can push back against executive cuts on aid. Yet on tax secrecy and climate policy, no comparable pushback has emerged so far. Future budget and election cycles will determine whether this changes.
Meanwhile, the human cost of 2025 is already measurable. Women’s organizations, health programs, and humanitarian responders absorbed the sharpest shocks. Developing countries face a difficult combination: less aid, less market access, and less climate finance simultaneously.
Rebuilding trust with global partners will likely take far longer than the policy changes themselves took to land. The next OECD dataset, expected in December 2026, will confirm final 2025 ODA figures. RYB will update this page as new data and policy decisions emerge.
Sources and References
- OECD, “A historic decline in foreign aid: preliminary 2025 ODA data”: oecd.org/a-historic-decline-in-foreign-aid-preliminary-2025-oda-data.html
- OECD, “International aid fell sharply in 2025” (press release): oecd.org/international-aid-fell-sharply-in-2025-says-oecd.html
- OECD Development Co-operation Profile: United States: oecd.org/united-states_884f742e-en.html
- UN Women, “At a breaking point: The impact of foreign aid cuts on women’s organizations”: unwomen.org/the-impact-of-foreign-aid-cuts-on-womens-organizations-in-humanitarian-crises-worldwide
- Women’s Refugee Commission, “A Year of Harms: The Impact of US Foreign Aid Cuts”: womensrefugeecommission.org/wp-content/uploads/2026/01/YearofHarms_Report.pdf
- Center for Global Development, “US Congress Says Yes to Foreign Aid”: cgdev.org/blog/us-congress-says-yes-foreign-aid-now-comes-hard-part
- NPR, “Congress passes $50 billion foreign aid bill, despite Trump’s cuts in 2025”: npr.org/2026/02/06/nx-s1-5702252/foreign-aid-trump-cuts
- Tax Justice Network, Indexes & Tools (Financial Secrecy Index and Corporate Tax Haven Index rankings): https://taxjustice.net/indexes-tools/
- Tax Justice Network, United States country profile: taxjustice.net/country-profiles/united-states/
- Council on Foreign Relations, “The United States Exits Paris Agreement”: cfr.org/articles/united-states-exits-paris-agreement
- Earth.Org, “One Year of Trump: How the US Reversed Climate Progress”: earth.org/one-year-of-trump-how-the-us-reversed-climate-progress-at-home-and-abroad/
- UNCTAD, “Mapping the size of new US tariffs for developing countries”: unctad.org/news/mapping-size-new-us-tariffs-developing-countries
- UNCTAD, “From disruption to diversification: tariff shocks and least developed countries”: unctad.org/news/disruption-diversification-how-can-least-developed-countries-strengthen-resilience-tariff
- Sustainable Development Report 2026 (SDSN / Dublin University Press): s3.amazonaws.com/sustainabledevelopment.report/2026/sustainable-development-report-2026.pdf
- RYB, Official Development Assistance (ODA): redyellowblue.org/finance/oda
United States
United States of America (USA)
Population
339,665,118 (2023 est.)
332,639,102 (2020)
326,625,791 (2017)
Capital: Washington, DC
Internet country code: .us
Government
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Background
Britain’s American colonies broke with the mother country in 1776 and were recognized as the new nation of the United States of America following the Treaty of Paris in 1783. During the 19th and 20th centuries, 37 new states were added to the original 13 as the nation expanded across the North American continent and acquired a number of overseas possessions. The two most traumatic experiences in the nation’s history were the Civil War (1861-65), in which a northern Union of states defeated a secessionist Confederacy of 11 southern slave states, and the Great Depression of the 1930s, an economic downturn during which about a quarter of the labor force lost its jobs. Buoyed by victories in World Wars I and II and the end of the Cold War in 1991, the US remains the world’s most powerful nation state. Since the end of World War II, the economy has achieved relatively steady growth, low unemployment and inflation, and rapid advances in technology.