Washington, July 2, 2025 (Agencies) — In a sweeping policy shift, U.S. Secretary of State Marco Rubio has announced the formal closure of the United States Agency for International Development (USAID), ending over six decades of American foreign aid operations under the agency’s banner. The decision, effective July 1, transfers all remaining functions to the U.S. State Department, marking what Rubio called “the beginning of a new era of global partnership, peace, investment, and prosperity”.
Rubio criticized USAID for straying from its original mission, accusing it of promoting “anti-American ideals,” supporting controversial NGOs, and fostering what he termed an “NGO industrial complex”. He emphasized that future U.S. assistance will be “targeted and time-limited,” favoring nations that demonstrate the “ability and willingness to help themselves”.
- Key Developments:
- USAID’s $715 billion legacy: Since its founding in 1961, USAID has administered over $715 billion in inflation-adjusted foreign aid, including major contributions to global health, education, and disaster relief.
- Transition to State Department: All foreign assistance programs will now be managed by the State Department, with a focus on trade, investment, and bilateral agreements over traditional aid models.
- Massive program cuts: Approximately 83% of USAID programs were canceled earlier this year, and thousands of employees were either laid off or placed on leave.
- Health impact concerns: A study published in The Lancet warns that the dismantling of USAID could lead to over 14 million preventable deaths by 2030, particularly from diseases like HIV/AIDS and malaria
The closure has drawn sharp criticism from former U.S. presidents, global health experts, and humanitarian organizations. Barack Obama and George W. Bush issued a joint farewell to USAID staff, with Bush stating,
“Is it in our interest that 25 million people who would have died now live? I think it is.”
Meanwhile, Rubio defended the move as a necessary correction to decades of “inefficiency,” asserting that future aid will be clearly branded with the American flag to reflect its origin and strategic intent.
The Department of Government Efficiency (DOGE), led by Elon Musk, played a central role in the agency’s dismantling, with Musk reportedly boasting that USAID had been put through the “wood chipper”.
As the U.S. pivots toward a “trade-over-aid” model, analysts warn that the vacuum left by USAID could be filled by rival powers like China, potentially reshaping global influence in vulnerable regions.