Within five days of taking office as the 47th President of the United States, Donald Trump issued an executive order that sent shockwaves across international aid communities. On January 25, 2025, the United States Agency for International Development (USAID) formally directed its implementing partners in Bangladesh to immediately suspend all ongoing contracts, grants, and assistance programs for a period of 90 days. This move followed the president's broader decision to halt US operations in Bangladesh, raising questions about the future of foreign aid in the region.

The executive order, which took effect on January 20, 2025, was part of Trump's agenda to reassess US-backed global aid programs. The State Department swiftly acted on this directive, issuing a "stop-work" order just days later. The order froze all existing foreign assistance programs and put a hold on new aid commitments under the newly mandated review. However, notable exceptions were made for Israel and Egypt, as these nations were excluded from the suspension list.

A memo, reportedly signed by Secretary of State Marco Rubio and obtained by NPR, revealed further details about the scope of this decision. It outlined that a "comprehensive review of all foreign assistance" would be conducted and completed within 85 days. The findings of this review would then be presented to the Secretary of State for consideration and recommendations to President Trump.

In line with the executive order’s objectives to "reevaluate and realign" foreign aid to better serve America's "interests and values," USAID issued a clear directive to its partners in Bangladesh. The statement required all work under its contracts and agreements to be stopped with immediate effect.

USAID’s Directive to Implementing Partners in Bangladesh

A notice shared via 𝕏 (formerly Twitter) provided specific instructions to USAID’s implementing partners in Bangladesh. The directive stated:

“The letter serves as a directive to all USAID/Bangladesh Implementing Partners to immediately stop, cease and/or suspend any work performed under your respective USAID/Bangladesh contact, task, order, grant, cooperative agreement or other acquisition or assistance instrument.”

Furthermore, the notice emphasized the need for implementing partners to act responsibly during this suspension period.

“Partners shall take all reasonable steps to minimize the incurrence of costs allocable to their awards. Partners shall not resume work under their awards until notification has been received in writing from the Contracting/Agreement Officer that this award Stop Work Order / Suspension has been cancelled.”

This decision aligns with Trump’s assertion that foreign aid provided by the US was "not aligned" with the nation's "interests and values." The halt in aid to Bangladesh is part of a broader reevaluation of US foreign policy and financial commitments overseas.

This suspension of aid has far-reaching implications, not just for Bangladesh but for the global aid structure. As stakeholders await further developments from the comprehensive review ordered by the Trump administration, questions linger about how this abrupt pause will impact ongoing development projects and the millions who depend on them.

The decision to suspend all US aid to Bangladesh under USAID has sent ripples across the nation’s political and economic landscape. The White House justified the move with a strong stance, asserting:

“The United States foreign aid industry and bureaucracy are not aligned with American interests and in many cases antithetical to American values. They serve to destabilize world peace by promoting ideas in foreign countries that are directly inverse to harmonious and stable relations internal to and among countries.”

Furthermore, it emphasized that foreign assistance must align with the President’s foreign policy:

“It is the policy of the United States that no further United States foreign assistance shall be disbursed in a manner that is not fully aligned with the foreign policy of the President of the United States.”

This directive has left the Muhammad Yunus-led government of Bangladesh grappling with the potential fallout.

USAID’s Vital Role in Bangladesh

USAID’s programs in Bangladesh, which form the largest aid initiative in Asia, have been pivotal in addressing critical issues. These include food security, health initiatives, and governance, alongside significant contributions to education and environmental projects. USAID has also been instrumental in Bangladesh’s humanitarian aid efforts, particularly in managing the ongoing Rohingya refugee crisis.

As the single largest donor to Bangladesh's humanitarian portfolio, the US has provided critical support in addressing the needs of millions displaced by the crisis. Since 2017, the US has contributed approximately $2.4 billion towards Rohingya-related humanitarian efforts, cementing its position as a leading ally in this domain.

A Fragile Economy Faces New Challenges

The suspension of US aid comes at a time when Bangladesh is already navigating a precarious financial situation. In the past year, the Yunus administration sought $5 billion in financial aid from international lenders to stabilize dwindling foreign exchange reserves. Additionally, the country requested a $4.7 billion bailout package from the International Monetary Fund (IMF) to mitigate the economic strain.

The halt in funding jeopardizes Bangladesh's ability to address these financial woes. International aid has long been a cornerstone in stabilizing the nation’s textile industry, a key economic driver, and providing relief amid its economic turmoil.

The suspension also disrupts previously established funding commitments. In September 2024, the US had pledged $202 million in aid to Bangladesh. This followed a broader USAID agreement from 2021, which allocated $954 million in aid for the period between 2021 and 2026. Of this, $425 million had already been disbursed, leaving a substantial amount now frozen under the suspension order.

Broader Implications of the ‘Stop-Work’ Order

The US State Department’s sweeping “stop-work” order on foreign aid, drafted by the Department’s foreign assistance office and signed by Secretary of State Marco Rubio, halts all non-military foreign assistance programs, with the sole exceptions of military financing for Israel and Egypt. The reasons for this abrupt directive remain undisclosed, but the order forms part of a comprehensive review of foreign aid allocations under President Trump’s administration.

This development poses a major setback for Bangladesh’s government, as it battles to manage its financial crisis while continuing critical development and humanitarian efforts. For a nation heavily reliant on international support, the suspension of aid by its largest donor underscores the fragility of its economic and social stability in the face of shifting global policies.

Trump Reviews US Foreign Assistance, Imposes 90-Day Moratorium

On his very first day in office, January 20, 2025, President Donald Trump issued a sweeping executive order to review all US foreign development assistance. The order placed an immediate 90-day moratorium on foreign aid disbursement to evaluate the efficiency and alignment of aid with his administration’s policy goals. However, the full scope of the review was not immediately clear, leaving many recipient countries and aid organizations uncertain about its impact.

This decision signals a potential shake-up in the global aid structure. The United States is the largest single contributor to global development assistance, allocating approximately $72 billion in foreign aid in 2023 alone. With such substantial financial contributions under review, the implications of this order are expected to reverberate widely across the world.

For Bangladesh, this development poses a significant setback. The country is already reeling from the aftermath of last year’s violent revolution that led to the overthrow of the Sheikh Hasina government. Efforts to restore stability and rebuild critical institutions have depended heavily on international aid, much of which comes from the United States.

The sudden halt in US funding threatens to derail ongoing recovery efforts. Bangladesh’s reliance on foreign assistance for essential services, infrastructure rebuilding, and humanitarian initiatives, particularly in the wake of political turmoil, underscores the gravity of this decision.

The order’s potential to cut billions of dollars in aid has sent shockwaves through aid-dependent economies and development agencies. While details of how much funding might be affected remain unclear, the mere possibility of such a substantial reduction raises concerns about the future of ongoing projects.

The review is part of Trump’s broader policy approach to ensure that US foreign assistance aligns with his administration’s priorities. The implications for global aid dynamics, particularly for vulnerable nations like Bangladesh, highlight the challenges posed by this reevaluation of foreign aid distribution.