This week, Trump shut down USAID. Here’s why China is cheering.

This week, hundreds of USAID employees were blocked from entering headquarters and locked out of their work accounts after Department of Government Efficiency chief Elon Musk announced that he and President Trump had agreed to shut down the agency. The consequences of this decision will stretch far beyond budget sheets and bureaucratic reorganization — it marks a massive strategic victory for China.

Since its establishment in 1961 by President John F. Kennedy, USAID has been one of America’s most powerful tools for global influence, providing billions of dollars in development assistance to countries in need while promoting governance, transparency and economic independence. But beyond foreign aid, it has served as a counterbalance to China’s global ambitions, particularly through its Belt and Road Initiative. By shuttering USAID, the U.S. is handing Beijing the opportunity to expand its economic and political dominance unchecked.

China’s Belt and Road Initiative, launched in 2013, has been marketed as an infrastructure project, but in reality is a powerful geopolitical strategy. Through massive loans for roads, ports and railways, China has woven itself into the economic fabric of more than 150 countries, often leaving them saddled with unsustainable debt. These debts come with strings attached: when countries struggle to pay, China seizes strategic assets, like Sri Lanka’s Hambantota Port, or exerts political pressure to secure favorable trade deals, military access or diplomatic support.

For example, China signed Belt and Road agreements with Kiribati and the Solomon Islands, contingent on both countries halting their diplomatic recognition of Taiwan. Along with the BRI agreement, the Solomon Islands also signed a security agreement with China, with plans to expand the Honiara port. Many Chinese-financed ports and infrastructure projects are “dual-use,” meaning they can support both commercial shipping and military operations. 

USAID has been a critical force in countering this expansion. Through grant-based infrastructure projects, governance assistance and economic development programs, the U.S. has provided an alternative to Beijing’s exploitative financing.

Unlike China’s predatory loans, USAID initiatives do not demand sovereignty concessions, military basing rights or political compliance. They promote long-term stability and economic self-sufficiency rather than debt dependency. With its elimination, the U.S. is effectively abandoning its ability to shape the global development landscape, allowing China to deepen its military footprint in critical regions.

With USAID dismantled, China’s ability to entrench its economic influence will accelerate. Countries that once had a choice between American-backed development and Chinese loans will now find themselves with only one option: Beijing.

This is not just a foreign policy concern — it has direct consequences for U.S. national security. As China gains greater control over key global trade routes, it can leverage its infrastructure dominance in future conflicts. A more emboldened China, with economic and military leverage over dozens of countries, will make it even harder for the U.S. to counter Beijing’s assertiveness in the South China Sea, Taiwan and beyond.

The shutdown of USAID is more than a budgetary decision — it signals an American retreat from global leadership. Foreign aid has long been a tool for diplomatic engagement, allowing the U.S. to build alliances, foster goodwill and promote stability in regions vulnerable to authoritarian influence. USAID has been instrumental in this, strengthening U.S. partnerships and maintaining influence in regions where direct military presence would be unfeasible or undesirable.

China, by contrast, views foreign assistance as a means of consolidating power. Through the Belt and Road Initiative, it has secured votes at the United Nations, expanded its economic dependencies and pressured governments into aligning with its geopolitical objectives.

Now, the message to the world is clear: America is withdrawing, and China is ready to fill the void.

Trump’s decision to shut down USAID is not just a cost-cutting measure — it is a fundamental shift in America’s global posture. Without a U.S.-led alternative, Beijing’s coercive diplomacy will spread unchecked, leaving nations vulnerable to debt traps, military encroachment and authoritarian influence.

At a time when China is making aggressive moves to reshape global power structures, America should be strengthening its influence, not abandoning the field. This decision will reshape the world order, signaling an abandonment of democratic values on the world stage.

For decades, USAID has promoted free elections, independent media, human rights and the rule of law, pillars of democracy that counterbalance authoritarian regimes. It has supported grassroots movements fighting for civil liberties, helped nations build transparent institutions and provided an alternative to governance models based on repression and state control.

Without USAID, China will be free to deepen its influence, empowering regimes that silence opposition, restrict press freedoms and erode the rights of their citizens. The loss of USAID is China’s gain, and that is a price the U.S. cannot afford to pay.

Emily Suh is a third-year student at Stanford University and a former intern at USAID.