Will “aid over trade” replace USAID?
The U.S. Mission’s “Trade Over Aid” forum in New York has gathered attention as Trump administration officials, including U.S. Ambassador to the United Nations Mike Walz, champion the shift towards private investment instead of traditional foreign aid.
In an exclusive interview, Walz emphasized a significant transition in U.S. foreign aid policy, aiming to prioritize trade and private investments over taxpayer-funded programs. “For years, billions have been invested in aid programs with minimal returns,” he noted, highlighting the absence of private sector representation in global discussions related to development.
Walz articulated that this new model seeks to foster job creation for American businesses while enhancing living conditions abroad, which could mitigate factors contributing to poverty and terrorism.
In 2025, the administration initiated a move to dissolve USAID, arguing it often fell short in aligning with U.S. foreign policy. When questioned about the potential replacement of USAID by “Trade Over Aid,” Walz clarified that while USAID’s functions would transition to the State Department, the effort exceeded just a single agency. He remarked, “This is an efficient effort to get aid that aligns with our foreign policy.”
As USAID is being integrated into the State Department, with aid budgets tightening, this administration is presenting an alternative model for supporting underprivileged nations. The focus now seems to be on bolstering private capital and business engagement with U.S. entities.
The forum assembled representatives from various countries, alongside major corporations like Microsoft and Google, fostering discussions around these concepts. Czech Environment Minister Igor Cerveny shared insights reflecting on his country’s transition post-communism, emphasizing the importance of building industries and jobs rather than fostering dependency.
Cerveny highlighted that trade creates opportunities for collaborative growth rather than continuous requests for financial support. Ambassador Dan Negrea, leading the U.S. mission’s efforts, voiced the necessity of a modified approach given the current state of global aid budgets.
Interestingly, he pointed out that developing nations showed less resistance to the initiative compared to traditional donors. Many countries, according to Negrea, are eager to transition from aid dependency to dignified partnerships in development.
However, some leaders caution that while trade is vital for long-term development, it cannot swiftly replace aid, especially in emergencies. Democratic Republic of the Congo’s Foreign Affairs Minister stressed that aid remains crucial during crises, though she acknowledges the potential of trade for future growth.
The initiative has already attracted 46 countries and launched a digital library containing various capacity-building resources. Yet, Negrea admitted that the results are still in early phases, aiming to convert proposals into tangible outcomes without burdening U.S. taxpayers.
A significant challenge remains in directing private investments to areas where aid has historically been essential, especially in regions marked by instability and high risk.
During the forum, Alexander de Croo, a former Belgian prime minister, remarked that trade and aid should complement each other, stressing the need for foundational development to make markets thrive.
Microsoft’s Vice President echoed this sentiment, recognizing aid’s irreplaceable role in sectors like health and disaster relief. For the Trump administration, the vision of “trade over aid” aims to reduce dependency while enhancing opportunities for American businesses and international partners alike.
Ultimately, the challenge will be whether this new approach can be effective not just in favorable environments, but also in the more challenging contexts where traditional aid has been essential in the past.
