REPORT: America’s Foreign Aid Retrenchment: Implications for US-Japan Cooperation
[米国の対外援助削減: 日米協力に与える影響]
In January 2025, the US government shocked the world by abruptly freezing its foreign assistance, a move that eventually led to the termination of roughly two-thirds of US-funded projects and the dismantling of USAID.
This groundbreaking report from the United States-Japan Foundation and Peace Winds America compiles analysis from top policy experts as well as firsthand insights from on the ground in hard-hit communities to paint a picture of how the American foreign aid retrenchment is transforming the development and humanitarian sectors. It documents the impact that the dramatic US policy shift has had on vulnerable communities, how it has weakened the basic infrastructure of the development sector, what this means for Japan and other major donors, and how the United States and Japan might reenvision US-Japan development cooperation going forward.
Links to download report:
The US foreign aid cuts have been the biggest shock to the development sector in modern history. This report highlights a number of key points.
- The US cuts account for roughly one-tenth of global overseas development assistance (ODA), and experts estimate that, by the end of September 2025, more than 500,000 people may have already died as a result.
- Japan-related NGOs and companies lost $9.4 million when nine US government contracts were fully or partially cut, triggering the layoffs of 130 local staff and contractors in developing countries. This is relatively limited compared to the impact other countries have seen.
- However, over the long run, the damage to the broader development ecosystem will have profound implications for aid organizations from Japan and other countries, making it much harder for them to operate. The United States disproportionately supported a range of core functions—logistics, security measures, data collection, coordination, and accountability mechanisms—that comprise the plumbing of the humanitarian system, and these are now eroding.
- The US aid drawdown is also opening up opportunities for China and Russia to expand their influence, shape digital and governance norms, and erode support for the international liberal order—and they are seizing the moment.
- Even if US funding were to come back swiftly, it will still take at least two years for the remaining US foreign assistance agencies to fully regain operational footing.
- There is a three-decade history of US-Japan development partnership, but most joint cooperative programs have come to a halt. It is in the national interest of both countries to start as quickly as possible to restart US-Japan development cooperation.
About the Authors
James Gannon is CEO of the humanitarian group Peace Winds America, and previously headed the Japan Center for International Exchange (JCIE/USA), where he focused on deepening international cooperation on development assistance, health, and disaster response.
Michael Schiffer led USAID’s Asia work until January 2025 as assistant administrator for Asia. He is a partner at Scalare Advisors and previously served as senior advisor with the Senate Foreign Relations Committee and in various other senior government and nonprofit posts.
In the News:
• Mainichi Shimbun (English Only): Opinion: “Tokyo summit a chance to revitalize US-Japan development cooperation”
• Mainichi Shimbun (Japanese/日本語 Only): 「日米は開発援助で協力を USAID元長官補と人道支援NPO代表が寄稿」
(Opinion: ”The US and Japan should cooperate on development aid – former USAID assistant administrator and NPO representative”)
• Nikkei Asia (English Only): “China slowly steps in to fill foreign aid vacuum left by Trump”
• Asahi Shimbun (Japanese/日本語 Only): 「USAID解体めぐり『日本のリーダーシップ発揮を』米NPO提言提言」(“‘Japan must demonstrate leadership’ after dismantling of USAID – US NPO recommendation”)
• The Nikkei (Japanese/日本語 Only):「『日本はODA増額を』USAIDの削減受け 米民間リポート」
(“’Japan should increase ODA’ after USAID cuts – US civil society report”)
• Jiji Press (Japanese/日本語 Only):「『米の対外援助削減、日本は好機』ＯＤＡ維持・増額を提言―ＮＧＯ」
(“’US foreign aid cuts present golden opportunity for Japan’—NGO recommends sustaining or increasing ODA”)
• NHK (Japanese/日本語 Only):「トランプ政権 対外援助見直し 『中ロが空白を埋めるおそれ』」
(“Trump administration reconsiders foreign aid — ‘Fears that China and Russia can fill the vacuum'”)
• Peace Winds Press Conference at Japan National Press Club (English and Japanese Audio) (October 10)
• Ministry of Foreign Affairs of Japan Press Release (October 8): (English) “Courtesy Call on Parliamentary Vice-Minister ERI by Mr. Jacob M. Schlesinger, President/Chief Executive Officer of the United States-Japan Foundation, and Mr. James Gannon, CEO of Peace Winds America”; (日本語) ジェイコブ・スレジンジャー米日財団理事長及びジム・ギャノン・ピースウィンズ・アメリカCEOによる英利外務大臣政務官表敬