The Trump administration’s efforts to dismantle the U.S. Agency for International Development, which officials have said is intended to rein in wasteful spending, has left American workers in limbo and threatens billions of dollars the agency spends on American businesses and organizations, global development experts and industry representatives told The Washington Post.
Gutting USAID threatens billions of dollars for U.S. farms, businesses
U.S. businesses that sold goods and services to USAID are in limbo, including American farms dealing in rice, wheat and soybeans purchased as food aid.
February 6, 2025 The Washington Post
By Daniel Wu
USAID oversees projects such as food aid, disaster relief and health programs in over 100 countries with a staff of more than 10,000 and a budget of around $40 billion. Billions of those dollars flowed back into the American economy until President Donald Trump ordered a 90-day freeze on foreign-aid spending last month.
Now U.S. businesses that sold goods and services to USAID are in limbo. That includes American farms, which supply about 41 percent of the food aid that the agency, working with the U.S. Department of Agriculture, sends around the world each year, according to a 2021 report by the Congressional Research Service. In 2020, the U.S. government bought $2.1 billion in food aid from American farmers.
Purchases and shipments of U.S. food aid worth over $340 million — including rice, wheat and soybeans — have been paused during Trump’s foreign-aid freeze, according to officials and an email obtained by The Post. That has left hundreds of tons of American-grown wheat stranded in Houston alone, Rep. Angie Craig of Minnesota, the highest-ranking Democrat on the House Agriculture Committee, said Tuesday.
Besides farmers, researchers whose work is funded by USAID have been furloughed. Smaller companies in sectors such as global health care could go out of business, upending the jobs of office staff and security guards. Experts and representatives from the industries affected said the disruption will worsen if the pause in spending persists and USAID continues to lose staff that once administered these programs.
“You’re talking about a direct impact on American products and American jobs,” said George Ingram, a senior fellow at the Center for Sustainable Development at the Brookings Institution.
Asked for comment, the White House said it was cutting programs that do not benefit Americans.
“President Trump is ensuring that taxpayer-funded programs at USAID align with the national interests of the United States, including protecting America’s farmers,” said White House spokeswoman Anna Kelly. “He will cut programs that do not align with the agenda that the American people gave him a mandate in November to implement and keep programs that put America First.”
In an email, the White House listed several USAID initiatives that the administration took issue with, including a $2 million program to provide gender-affirming health care in Guatemala and a $1.5 million program to advance diversity, equity and inclusion in Serbia’s workplaces.
Secretary of State Marco Rubio, the acting director of USAID, said Monday that “a lot of functions of USAID” will continue. Rubio issued a waiver permitting lifesaving humanitarian aid to continue, though organizations reported confusion on which programs were eligible, and pauses in food shipments have been reported since the waiver was issued.
On Tuesday, USAID said that all “direct hire” staff will be put on paid leave by Friday night and that all staff overseas will be repatriated within 30 days. The bulk of USAID staff have been fired, furloughed or put on leave, The Post has reported.
Meanwhile, billionaire Elon Musk, whose Department of Government Efficiency is leading the effort to shrink the federal government, has called USAID a “criminal organization” and criticized its spending on foreign aid.
“Your tax dollars should be spent on America or the government should just tax you less,” Musk wrote on X on Tuesday.
Experts said that USAID’s humanitarian aid programs rely heavily on goods and services provided by U.S. companies and nonprofits.
“The bulk of U.S. assistance is implemented through U.S. organizations,” Ingram said. “A lot of the money starts out with American organizations staffed by Americans.”
An email from the United Nations’ World Food Program confirming a USAID stop-work order said the funding pause disrupted more than 507,000 metric tons of American food aid. An additional 180,126 metric tons of planned food purchases had been halted entirely, and a “substantial quantity” of food aid in transit in the United States was still being tallied.
Nick Levendofsky, executive director of the Kansas Farmers Union, said the funding freeze created further stress for the state’s farmers as they grapple with rising costs, low commodity prices and the potential impacts of tariffs.
“When we continue to throw wrenches into the mix of their daily lives, it adds more uncertainty to an already uncertain world,” Levendofsky said.
Representatives of major farm industry groups said they hoped American food aid programs would continue.
“USAID plays a critical role in reducing hunger around the world while sourcing markets for the surplus foods America’s farmers and ranchers grow,” Dave Salmonsen, senior director of government affairs at the American Farm Bureau Federation, said in a statement.
Steven Mercer, vice president of communications for U.S. Wheat Associates, said USDA grants to purchase 235,000 metric tons of U.S. wheat as food aid have been temporarily paused. The department works closely with USAID to distribute such aid to countries in need.
“We hope to see that pause lifted, as it is an important program that uses U.S.-grown wheat to support development projects and, in the process, gives us a chance to showcase the quality and value of U.S. wheat in local markets,” Mercer said.
Michael Klein, a spokesman for USA Rice, said that the group is still assessing the impacts of the funding freeze but that it would almost certainly affect rice farmers. The United States exported 161,000 metric tons of rice as food aid in the 2024 financial year, worth over $126 million, he said.
“There will certainly be an impact,” Klein said. “Is it a temporary pause? Is it a matter of days [or] weeks? We don’t know.”
The representatives said the intended recipients of American food aid would be most immediately harmed by the disruption. Levendofsky, of the Kansas Farmers Union, said he was also concerned by news that USAID staff have been put on leave, which could affect the organization’s ability to coordinate the purchases and shipping of American food aid in the future.
“You start dismantling these programs, and it’s a ripple effect,” he said. “The farmers are affected; the farm economy is affected.”
Hannah Natanson contributed to this report.