Trump Administration: New Era for U.S. Diplomacy
On the first day back in office, President Donald Trump signed an executive order temporarily suspending all U.S. foreign aid programmes for 90 days, pending a review to determine their alignment with his policy objectives.
The order, one of the many issued that day, asserted that the “foreign aid industry and bureaucracy are not aligned with American interests and, in many cases, run counter to American values.” It further contended that such programmes “undermine global stability by promoting ideas in foreign nations that directly contradict the principles of internal and international harmony.” As a consequence, Trump declared that “no further U.S. foreign aid shall be disbursed in any manner that is not fully aligned with the foreign policy of the President of the United States.”
Since the end of WWII, the U.S. consolidated its national security and interests abroad through the 3D Planning Guide－Diplomacy, Development, and Defense. As a part of this strategy, Washington has continued to play a pivotal role in international humanitarian aid and assistance.
However, on 20 January 2025, Trump announced a temporary freeze on the majority of foreign aid for the next 90 days. He further stated that the existing U.S. foreign aid system and bureaucratic framework had failed to align with national interests and, in some cases, even contradicted “American values.” As a result, a comprehensive review of all aid programmes was deemed necessary.
The United States Agency for International Development (USAID) was among the first to bear the brunt of this decision. International non-governmental organisations (NGOs), contractors, and temporary staff working in collaboration with the U.S. government were all prohibited from utilising any American assets, including allocated funding as well as vaccines, medicines, food, and humanitarian supplies that had already been delivered to aid frontlines and were awaiting deployment. The Trump administration urged USAID employees to comply with the restructuring process, adjusting the distribution of aid resources to align with the White House’s “America First” policy, while warning that those who disobeyed the order would face disciplinary action.
On 24 January, the Trump administration took further steps by ordering a complete shutdown of USAID, indefinitely suspending all departmental programmes. In February 2025, a decision was made to shut down USAID entirely. This move had a profound impact on U.S. global influence and the international humanitarian aid system, forcing the termination of numerous assistance programmes in developing countries. The consequences extended across various sectors, including economic development, public health, and food security.
The Shift of 3D Planning Guide?
USAID was established on 3 November 1961 during the presidency of John F. Kennedy at the height of the Cold War between the U.S. and the Soviet Union. The purpose of the establishment of the USAID is to implement the Foreign Assistance Act of 1961. Over the past six decades since its inception, the agency has undertaken numerous significant missions, including assisting countries of strategic importance to the US and those experiencing conflict. It has also played a leading role in alleviating poverty, combating diseases, and addressing humanitarian needs. Furthermore, by supporting the economic growth of developing countries and enhancing their capacity to participate in global trade, the agency has also reinforced the commercial interests of the US.
Kennedy advocated that the U.S.’ foreign policy should encompass three key dimensions: military, diplomacy, and development aid. He stressed the importance of economic cooperation to strengthen ties with developing countries. By promoting free-market principles, technological collaboration, and institutional reforms, he aimed to attract more nations to capitalism and push back against Communism. This approach thereby helped to expand the United States’ global influence, also linked U.S. foreign aid with national security strategy.
According to the official USAID website, its long-term objective is to assist recipient countries in transitioning from aid dependency to becoming strategic partners and, eventually, donors themselves. Currently, USAID manages approximately 60% of U.S. foreign aid funds, with a total disbursement of $43.79 billion in the 2023 fiscal year. A report from the Congressional Research Service (CRS) in January 2025 indicates that USAID employs around 10,000 personnel, two-thirds of whom are stationed overseas, supporting development programmes in approximately 130 countries worldwide. However, following policy decisions made under the Trump administration, this once highly influential agency is now facing dissolution, signalling the beginning of a different phase in U.S. foreign aid policy and diplomatic strategy.
The International Order Shaped by American Aid
After WWII ended, the U.S. actively promoted global aid programmes to help countries rebuild. The main goal was to stop the spread of communism and ensure international stability and security. In 1948, the U.S. Congress approved the Marshall Plan and established the Economic Cooperation Administration (ECA) to provide economic assistance. This plan played a key role in Europe’s recovery, benefiting countries such as the United Kingdom, France, and the Netherlands, allowing them to restore their economies quickly.
On 2 April 1948, the U.S. passed the China Aid Act (1948年援華法案) as part of its global aid initiative, providing the Republic of China (ROC) with a total of 400 million dollars in assistance. This included a special grant of 125 million dollars, economic aid of 275 million dollars, and projects such as the Rural Rehabilitation Programme (農村復興計畫). Around one-tenth of the total aid funds were allocated to this programme, covering food and essential goods supply, industrial reconstruction, and agricultural recovery. However, the ongoing Chinese Civil War created many difficulties in implementing the aid plan.
In December 1949, as Mao Zedong’s Communist forces won the civil war, the Nationalist leader Chiang Kai-shek decided to relocate the ROC’s government from Nanjing to Taipei. As the situation changed, most of the U.S. funds and supplies originally intended for China were redirected to Taiwan. This support became a crucial factor in Taiwan’s post-war economic development.
Taiwan’s Alignment with the U.S.: from Economic Progress to Democratic Governance
Between 1938 and 1945, Taiwan suffered extensive air raids by the United States, which severely damaged its economic production and industrial base. Agricultural development and food self-sufficiency were also adversely affected. As the Chinese Civil War progressed, more than one million Chinese refugees arrived in Taiwan within a short period, making food security a critical issue for maintaining social stability.
1950 was a pivotal year for Taiwan. It marked only five years since the end of the Second World War and was the first year of the relocation of the central government of the ROC to Taiwan. In June of the same year, the Korean War erupted. To ensure regional security, the United States announced the deployment of the Seventh Fleet to the Taiwan Strait and extended the period of aid to Taiwan.
At that time, Taiwan’s GDP per capita stood at only $922, which was lower than that of Ghana and Kenya and merely $50 higher than that of South Korea and Indonesia. The U.S. provided substantial aid, including flour, cornmeal, powdered milk, and various medicines, which were distributed across Taiwan through churches. Some Taiwanese citizens attended church services in order to receive food assistance. This phenomenon led to a rise in the influence of Christianity and Catholicism in Taiwanese society, with some individuals even converting to these faiths. Consequently, churches distributing American aid became colloquially known as “Mī-hún-kàu” (the “Flour Church”).
American aid toward Taiwan extended beyond essential goods and strategic materials, encompassing resources for infrastructure development, such as the construction of roads, bridges, water conservation projects, power plants, and the exploitation of natural resources. In 1951, the U.S. passed the Mutual Security Act, launching a structured aid programme aimed at helping Taiwan achieve industrial self-sufficiency. At the time, approximately 74% of Taiwan’s infrastructure funding was sourced from American aid, with Taiwan Power Company being the primary beneficiary. These developments not only enhanced the economic landscape but also laid the foundations for Taiwan’s subsequent industrialisation.
The impact of American aid was not limited to national infrastructure but also extended to industrial economic development. It supported the establishment of key industries, including fertiliser, cement, sugar, paper, and textiles. Additionally, it contributed to the advancement of education and culture, introducing American values and Western culture to Taiwanese society. For instance, Taiwan’s second modern comprehensive university was established with American assistance. Furthermore, top institutions such as National Taiwan University (originally founded by Japanese colonial authorities as Taihoku Imperial University), National Cheng Kung University, and National Taiwan Normal University also benefited from this support.
Another significant initiative was the United States Information Service (USIS), which operated under the United States Information Agency (USIA) to promote public diplomacy in Taiwan. Over several decades, the USIS published literary magazines, translated works by Taiwanese and American authors, and organised musical performances. Additionally, the USIS established libraries across Taiwan. In 2024, the Director of the American Institute in Taiwan (AIT), Sandra Oudkirk, noted that many Taiwanese citizens regarded these libraries as essential for the nation’s societal development. During the period of martial law, these libraries served as one of the few sources of accurate information about global affairs.
Another notable case was the Language Training & Testing Center (LTTC), formerly the English Training Center (ETC), which was initially established by the USIS. At the time, certain Taiwanese government officials participating in the “Technical Assistance Programme” required English proficiency for training in the United States. As a result, the centre provided intensive English training. Over time, its role expanded beyond civil servants to include students aspiring to study in the U.S., thereby fostering a new generation of Taiwanese talent with foreign language proficiency and strengthening the nation’s educational foundation.
American aid played a crucial role in shaping Taiwan during the 1950s, a period when the island remained impoverished and was overshadowed by the political repression of the White Terror. According to statistics from the USAID, Taiwan received nearly $1.5 billion in American aid between 1951 and 1965. From 1951 to 1960, American aid accounted for approximately 40% of Taiwan’s total imports, 38% of gross domestic investment, and 6% of its Gross National Product (GNP). Furthermore, about one-third of this aid was directed towards agricultural development, which contributed to nearly two-thirds of Taiwan’s domestic net capital formation. This support facilitated Taiwan’s agricultural recovery and laid the groundwork for the island’s industrialisation and modernisation in the 1960s.
U.S. aid has helped stabilise Taiwan in the face of military threats from Communist China, allowing it to emerge from poverty. Over the following decades, Taiwan maintained an average economic growth rate of nearly 10%, leading to what became known as the Taiwan Miracle. U.S. aid also played a role in Taiwan’s political evolution. By the late 20th century, Taiwan had embarked on a process of democratic reform. As of 2024, the nation had conducted eight direct presidential and parliamentary elections and experienced three peaceful transitions of power, solidifying itself as a democratic state.
The Trump Era for the Free World
U.S. aid has not only reshaped Taiwan’s developmental trajectory but also profoundly influenced the geopolitical landscape of East Asia and the Indo-Pacific region. Today, the focus of U.S. aid to Taiwan has shifted from early-stage development assistance to disaster response and capacity-building. Taiwan is no longer a traditional aid recipient but has emerged as a significant donor in international assistance efforts.
According to official statistics, recent years have seen limited USAID funding to Taiwan. For instance, in 2020, the amount stood at $150,000, decreasing to just $5,800 in 2023, before rising to $266,200 in 2024, with no recorded funding in 2021. Since the signing of a Memorandum of Understanding between Taiwan and USAID in November 2022, the cooperation has expanded beyond public health to encompass diverse areas such as climate change. These joint efforts aim to reinforce the U.S.-led international order while countering China’s global influence through aid initiatives targeting Taiwan’s diplomatic allies and partner nations.
For example, Taiwan and the U.S. have collaborated in Paraguay to support the development and upgrading of local small and medium-sized enterprises. On climate change, Taiwan has contributed $600,000 to USAID’s Pacific Islands Foundation for sustainable development projects and plans to engage in discussions on global health challenges during the World Health Assembly. In the field of public health, the Taiwan International Cooperation and Development Fund (TaiwanICDF) and USAID have jointly launched a digital healthcare initiative in Fiji, leveraging technological innovation to enhance disease prevention and training medical personnel across Pacific island nations, thereby strengthening regional epidemic preparedness.
However, these cooperative initiatives face uncertainty following the Trump administration’s decisions to dismantle USAID, withdraw from the World Health Organization, and exit the Paris Agreement. Despite this, deepening Taiwan-U.S. cooperation remains in both parties’ interests. The U.S. is a crucial pillar of Taiwan’s security, while Taiwan benefits from the stability of the US-led international order. Against the backdrop of increasing geopolitical challenges, Taiwan-U.S. collaboration offers a genuine win-win scenario.
From Washington’s perspective, aid to Taiwan represents a strategic investment that reinforces Taiwan as a steadfast ally of democracy and the free market. The COVID-19 pandemic and China’s assertive actions have further highlighted Taiwan’s critical role in global supply chains. During President Trump’s first term, Taiwan was not only a key partner in supply chain restructuring but also a staunch supporter of the “Clean Network” initiative.
As Taiwan President Lai Ching-te remarked on 14 February, Taiwan and the U.S. have maintained close cooperation since Trump’s first presidency, significantly enhancing Taiwan’s defence capabilities through 22 arms sales agreements worth a total of $18.763 billion. Economically, Taiwan’s investment in China declined to 11% of its total overseas investments in 2023 and further to 8% in 2024, while the U.S. has become Taiwan’s largest investment destination. President Lai further emphasised Taiwan’s commitment to expanding its investments and procurement from the U.S. to foster balanced bilateral trade. Lai also vows to lift defense spending to at least 3% of GDP this year. Against this backdrop, U.S. aid to Taiwan can be regarded as one of the most successful long-term investments in American foreign policy history.
(Featured photo from the White House via Flickr)
