Former President Trump, amid a bitter campaign, laid the groundwork for the foreign policy challenges he expects if he is re-elected, including a willingness to provide foreign aid in the form of loans rather than grants. There is.
“They want to give almost 100 billion to several countries. And I said, and I’m telling you, this is breaking news. We have breaking news. I said, ‘Why are we doing this?’ ‘If you do that, you’re not giving them $100 billion, you’re giving it to them as a loan,'” Trump said last month in South Carolina. He said this in his election speech.
President Trump has held rallies and campaign speeches almost regularly during the primary season, garnering overwhelming media attention for his comments on immigration and the economy, mocking President Biden and his record in office, and even comments about NATO. ing.
The former president, who continued to win the primary and whose last Republican challenger, former South Carolina Gov. Nikki Haley, suspended her campaign last week, has focused U.S. foreign policy on foreign aid financing programs. It also outlines how to move towards this direction. He objects to the United States’ recent history of giving subsidies to foreign countries that do not have to be repaid.
Speaking in Virginia this month, President Trump emphasized that when he was elected in 2016, he used foreign aid to pressure three Central American countries (El Salvador, Guatemala, and Honduras) to forcibly remove illegal immigrants and return them to their home countries. .
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Former President Trump holds a rally in Selma, North Carolina on April 9, 2022. (Peter Zai/Anadolu Agency via Getty Images)
“You remember when I got to the White House, the generals greeted me. I said, ‘MS-13, get these people out.’ Doctor, we’re not going to let them in again,”’ Trump recalled at a rally in Richmond when he won the White House in 2016.
“I said, ‘What country?’ They named those three countries. ‘Sir, we give them about $750 million a year.’ “It’s a pittance compared to what we give to others. We give to everyone. We’re stupid. But they give $750 million,” he continued. “…I immediately cut off all funding to these three countries. The next day, almost simultaneously, but separately, I received calls from the presidents of these three countries: ‘Sir, there is a misunderstanding. I understand.”
Fox News Digital interviewed Peter Dolan, a non-resident senior fellow at the Foundation for Defense of Democracies, a foreign policy think tank, who said that if President Trump wins on November 5th, the U.S. will be in line for a “more aggressive” Trump 2.0 administration. He said he can expect an approach. It’s about using foreign policy as a lever on the world stage.
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“Everyone’s attention is on the fireworks, but at these rallies, every week, Trump lays out a coherent foreign policy vision for his second administration,” Dolan said.
Former President Trump attends a rally in Casper, Wyoming on May 28, 2022. (Chet Strange/Getty Images)
Dolan explained that a potential shift in foreign policy to place more emphasis on foreign aid loans is “valuable” for the United States if delivered to countries with the ability to repay, citing Chile as a potential example.
“Foreign financing is valuable when it is affordable, when it finances projects that the country has the ability to repay and can recover profits. I gave one example, and it is a good one: Lithium mining in Chile. ” he said.
He said U.S. companies are interested in mining in Chile to supply lithium for a wide variety of batteries, but those companies don’t have access to ports to transport the lithium.
“Therefore, in a country like Chile that is relatively close and within U.S. interests, lending to a country like Chile to develop relationships could potentially help U.S. companies. “It will challenge China because it is a smart investment,” he argued.
In the 1990s, as foreign countries in Africa were drowning in debt to the United States and other creditors, countries such as the United States refrained from lending to countries that were unlikely to repay them, and instead offered aid in the form of aid. now available. Subsidy.
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The International Monetary Fund (IMF) states that “the debt problems currently faced by low-income countries will last for 25 years, thanks in particular to the Heavily Indebted Poor Countries Initiative, which has reduced unmanageable debt burdens across sub-Saharan Africa and other regions.” “It’s less than before,” he said. In a paper published in 2022, he said, “However, although the debt ratio has declined compared to the mid-1990s, debt has gradually increased over the past decade, and changes in the composition of creditors have made restructuring more likely. It’s going to be complicated.”
According to the IMF, historically, heavily indebted foreign countries that were unable to repay their debts and relied on international aid received financial aid from private banks and other borrowed money from the institution. .
“Today, China and private bondholders are taking on a larger lending role,” the post continues.
Chinese President Xi Jinping (AP Photo/Mark Schiefelbein)
While the United States moved from loans to subsidies in the early 2000s, China began doubling down on its use of loans.
“This shocked me. Think of all the countries that failed to repay their loans between 2006 and 2020,” Dolan said. “This means they had to go to the IMF and ask for support. And basically, this is when they essentially default on their debt. We say, ‘Look, we’re not going to repay the loan, and we need the IMF’ to basically cover us while we negotiate the debt. .”
According to IMF data, in 2006 China held 2% of the debt of poor countries that could not repay their loans, but as of 2020 that number had risen to 18%. Meanwhile, external debt to Paris Club creditors fell from 28% in 2006 to 11% in 2020.
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“So China started out as a lender to 2% of countries around the world that were unable to repay their loans, and went on to become almost a lender to one-fifth of all countries that failed,” Dolan said. Ta.
An Associated Press article last year said China is “the world’s largest and most unrelenting government lender” and is “depleting the foreign exchange reserves” of countries such as Pakistan, Kenya, Zambia, Laos and Mongolia. .
If U.S. leaders learn from China’s mistakes, the U.S. has a chance to achieve “net positive” results in foreign aid financing.
“If we decide not to follow the Chinese model and instead create an economically successful American model, this will be a net negative for China and a net positive for the United States. “We can do this by looking at past examples of the Marshall Plan and Lend-Lease programs,” Dolan said.
This 1930s photo shows President Franklin D. Roosevelt giving a “fireside chat” on a radio broadcast. (Stock Montage/Getty Images)
The Lend-Lease Act was a World War II-era policy that allowed the United States to lend or lease war materials to countries deemed critical to the defense of the United States.The Marshall Plan was signed by the President. A post-World War II initiative, President Harry Truman decided to provide economic aid to European countries rebuilding their infrastructure and economies after the end of Nazi Germany.
Dolan cited the Marshall Plan as a framework to consider if a second Trump administration takes office.
President Trump said nearly a year ago that he could end the war in Ukraine, but has yet to provide specifics.
“The Marshall Plan was never about giving away free money. The Marshall Plan created a credit system that allowed countries to buy products from America and draw that credit from their bank accounts at American banks. So the money stayed in the U.S. and the goods went overseas and helped balance the overseas accounts,” Dolan said.
President Harry S. Truman sits in the White House library, circa 1950. (Photo Search/Getty Images)
The White House announced last month that no money should be given in the form of foreign aid to any country unless it is given as a loan, not just a gift. The plan was said to be “impossible.” War-torn countries like Ukraine are trying to figure out the best path forward.
White House National Security Adviser Jake Sullivan (AP Photo/Andrew Harnik/File)
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White House National Security Adviser Jake Sullivan told reporters: “As for the loan to Ukraine, as I’ve said before, we requested it and the Senate passed it with overwhelming bipartisanship last week. “This is both military support and economic support.” last month.
“That economic aid is in the form of subsidies, because at a time when Ukraine is fighting for its life, we do not think it is the best way to ask Ukraine to take on and shoulder large amounts of debt. Because there isn’t,” Sullivan continued.
In an op-ed published this month on FOX Digital, foreign policy expert and former White House official Michael Allen said President Trump has proposed “viable and novel” ideas for aiding Ukraine. argued that the United States should consider the loan plan. -World War II lease.
Allen explained that President Trump is considering turning “arms costs” into loans to help Ukraine, with the former president stipulating that the loans would be repaid only if Ukraine “gained wealth.” He pointed out that
“The deal should be that the United States supports you as a nation (with conditions!). But if the country we are supporting turns against us or becomes wealthy in the future. “The loan will be repaid and the money will be paid if you return to the United States,” Trump continued in a Truth social media post last month.
Allen pointed to FDR’s lend-lease program as showing there is “historical precedent” for Trump’s potential lending plan.
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“During a Caribbean cruise after his reelection in 1940, President Roosevelt devised a mechanism by which the United States could lend or lease munitions and ammunition to countries deemed essential to the defense of the United States. Lend-Lease He compares Lend Lease to lending a garden hose. “My neighbor’s house is on fire.” By not treating the aid as a subsidy to Britain, FDR allayed concerns about “foreign aid.” wrote.
Former President Trump has floated the idea of turning “weapons costs” into loans to help Ukraine. (Sean Rayford/Getty Images)
“FDR had previously misled his political opponents by claiming that in exchange for giving Britain 50 naval destroyers, he would combine it with the transfer of British bases in the Caribbean and Western Atlantic to the United States. I did. How about that as a trading technique?”
Allen went on to say that “FDR’s maneuver to allow Britain to provide guidance” and “we should take advantage of that creativity, take President Trump’s ideas and accept the answer as yes.” Stated.
The Trump campaign did not respond to FOX Digital’s request for additional comment on its plans to focus on foreign aid financing if re-elected.
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Meanwhile, the 45th president elaborated this plan while continuing his election campaign.
“It’s called a loan. You give them money, and if they can pay it back, they pay it back. If they can’t pay it back, there’s something wrong with them and they don’t have to pay it back.”But if they’re in another country When we go to , they dump us like dogs, just like women drop men after a date because they don’t like them. If that were to happen to our country, it would be very easy for us to call in a loan,” Trump said. he said in his comments in South Carolina last month.
