Trump Proposes Redirecting USAID Funds Toward a New Financial Strategy
Advisers to former President Donald Trump proposes redirecting USAID to a government agency that will be led by the son of Leon Black, co-founder of Apollo Global Management, known for his negotiation skills. This measure is part of a restructuring of the U.S. global economic strategy.
Less Humanitarian Aid, More Private Investment
The new approach would reduce humanitarian assistance and give a more significant role to private investment funds, venture capital firms, and other financial players in projecting U.S. economic power. The proposal arises in the context of competition with China for influence and strategic projects abroad, while Elon Musk—with Trump’s support—advocates for shutting down the United States Agency for International Development (USAID), which has a $43 billion budget.
The DFC as the Core of the New Policy
Under these plans, part of USAID’s funding would be transferred to the U.S. International Development Finance Corporation (DFC), created during Trump’s first term and empowered to channel public funds into private investments abroad alongside institutional investors. This entity acts as a source of financing, an opportunity identifier, a co-investor, and a risk insurer for American investors interested in private projects outside the country.
Pending Confirmation and Divided Positions
A senior official, speaking anonymously, confirmed reallocating resources is one of several options the administration is currently evaluating for foreign aid. However, the timeline for implementing these initiatives remains uncertain, leaving key policy decisions unresolved. Moreover, on January 31, Trump nominated Ben Black as DFC’s next CEO, though his Senate confirmation remains pending. Ultimately, neither Black nor the White House has provided any public statements regarding these ongoing deliberations.
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Proposed Foreign Aid Reforms
Black, co-founder of Fortinbras Enterprises LP, has already presented his proposals, outlining a vision for reshaping U.S. foreign aid strategy. Moreover, on January 10, he co-authored an article with tech investor Joe Lonsdale advocating reallocating USAID funds to the DFC. Specifically, they argued much foreign aid is wasteful and should be reduced, prioritizing strategic investments in impactful global projects. Ultimately, their proposal emphasizes efficiency, economic influence, and long-term geopolitical advantages in key international regions.
Support Within the Republican Party
Secretary of State Marco Rubio and advisers advocate reducing USAID funding while strengthening the DFC, according to sources familiar with discussions. Moreover, this strategy was explored during interviews with DFC leadership candidates conducted late last year, signaling potential policy shifts. However, neither the State Department nor the DFC has publicly addressed these deliberations, leaving uncertainties about future developments. Ultimately, this proposal underscores ongoing debates over foreign aid priorities and economic influence in strategic global regions.
Legislative Hurdles and Focus on Greenland
To implement this vision, Trump must secure congressional reauthorization for the DFC, whose mandate expires this year, ensuring continued operations. Moreover, bipartisan support exists for doubling its investment capacity to $120 billion and expanding beyond low-income countries, increasing its global impact. Specifically, Lonsdale and Black highlighted Greenland as a strategic investment opportunity, aligning with Trump’s previously expressed interest in the territory. Consequently, with DFC backing, American mining, shipping, and natural resource firms could contribute capital and expertise, strengthening economic ties. Ultimately, expanding the DFC’s reach would bolster U.S. influence in critical regions, advancing long-term geopolitical and economic objectives.
Trump proposes redirecting USAID under Leon Black’s son risks prioritizing corporate interests over humanitarian aid. Coupled with Trump’s Greenland ambitions, this strategy reflects aggressive economic nationalism with uncertain diplomatic consequences.
