Trump Freezes USAID Funding, Cambodian Programs in Limbo

U.S. President Donald Trump speaks to reporters after signing a series of executive orders in the Oval Office of the White House on January 23, 2025 in Washington, DC.Photo by Anna Moneymaker / GETTY IMAGES NORTH AMERICA / Getty Images via AFP

PHNOM PENH – USAID-funded programs in Cambodia are facing a cloud of uncertainty following an executive order signed by newly inaugurated U.S. President Donald Trump on January 20. The order temporarily halts all U.S. foreign assistance for 90 days, sending ripples through development initiatives worldwide, including in Cambodia.

During this suspension, no new funding will be committed or disbursed, allowing for a comprehensive review of each program's effectiveness and alignment with U.S. foreign policy priorities.

“This review will determine whether programs will continue, be modified, or terminated altogether,” shared a country director of a USAID-funded initiative, who preferred to remain anonymous.

“While this is a temporary suspension, the long-term future of these initiatives hinges on the review's findings,” he added. “Programs aligned with the administration's priorities may resume, potentially with changes, while others could face significant cuts or termination.”

The January 20 executive order took a critical stance, claiming that the U.S. “foreign aid industry and bureaucracy are misaligned with American interests and, in many cases, contradict American values.”

It went on to assert that these programs “destabilize global peace by promoting ideas in foreign countries that conflict with internal and international harmony.”

As of Fiscal Year (FY) 2025, USAID managed a budget of approximately $22.58 billion globally.  In Cambodia, USAID's programs span several key sectors from agriculture and food security to health, democracy, human rights and governance, and economic growth. The proposed FY 2023 USAID tuberculosis (TB) budget for Cambodia is $6.5 million, supporting various technical areas to combat TB.

In October 2024, the United States announced more than $6 million in new USAID funding for civil society, media, and labor to support Cambodia's commitments to democratic rule and human rights.

One major concern is the fate of gender-inclusive programs in the sectors funded by USAID considering Trump’s sweeping changes to federal policies on diversity, equity, and inclusion and acceptability (DEIA). On the same day, Trump signed another order dismantling all federal DEIA initiatives and programs, placing related staff on immediate paid leave.

Another directive limited federal recognition of gender to two biological sexes, effectively rolling back protections for transgender individuals.

On 23 January, Trump issued a directive requiring all USAID officials to report colleagues who attempt to hide DEIA efforts by altering contract language or job descriptions. USAID Acting Administrator Jason Gray acknowledged in an internal memo that some individuals might have rebranded such programs to align with an "America First" agenda.

The memo instructs staff to report any attempts to obscure connections to DEIA ideologies since the November 5 election to [email protected] within 10 days.

“If this dismantling extends to federally funded programs, USAID initiatives that emphasize DEIA could face funding cuts, reevaluations, or a complete redirection,” warned the country director. “For instance, programs supporting gender equality, LGBTQ+ rights, or inclusive development could be deprioritized.”

Adding to the uncertainty, USAID headquarters in Washington, D.C., has gone silent. An email obtained by Devex revealed that USAID employees were instructed to pause all public communications as of January 20, following “clear guidance” from Washington. However, the email left questions unanswered—particularly whether this directive applies to partner organizations or the broader USAID network.

There is also ambiguity in the language of the executive order regarding funding obligations and disbursements.

Legal interpretations suggest that contracts where funds were obligated (committed) prior to the order may not be directly impacted. However, the actual disbursement of funds could be paused, pending the review's outcome. If funds have already been disbursed to implementing organizations, those contracts may continue unaffected. But where funds have been committed but not yet released, delays are likely, depending on how strictly the Office of Management and Budget enforces the freeze.

This 90-day suspension spells trouble for local and international NGOs in Cambodia.

“Programs already underway may encounter delays if additional funding is required,” the country director noted. “Communities relying on these initiatives—particularly in critical areas like healthcare, education, and food security—could face disruptions. Meanwhile, local partners and contractors may struggle financially if funding streams are interrupted.”

 

The broader concern is the damage to the U.S.'s reputation. Critics warn that this perceived unreliability could erode trust and diminish America’s influence in key regions.

 

Cambodianess

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