Australia is assessing the risks of strategic funding gaps in the Pacific and South-East Asia if USAID programs are permanently dismantled in a sweeping overhaul by the Trump administration.
The Nightly understands officials at the Department of Foreign Affairs and Trade have been tasked with identifying the potential consequences of a withdrawal of US development aid and whether it may open up vulnerabilities that could impact Australia’s national security.
According to the Lowy Institute, the US is the fifth-biggest funder of the Pacific behind Australia, China, Japan and New Zealand.
The White House decision last month to freeze funds from the US Agency for International Development (USAID) for at least 90 days to review how its programs align with President Donald Trump’s “America First” agenda, has sent shockwaves around the world.
While foreign policy analysts say the Pacific would weather the financial loss better than other more impoverished recipients, the potential decline of western soft power has triggered alarm bells in a strategic region where the US, Australia and New Zealand are jostling with China for influence.
The Albanese Government has been chasing bilateral security and cooperation deals with its Pacific Island neighbours since Canberra was blindsided by a secretive security pact between Beijing and Honiara in 2022 that sparked fears China was trying to establish a military foothold there.
Washington, under its top Indo-Pacific official Kurt Campbell, also stepped up its engagement.
Uncertainty about Mr Trump’s Indo-Pacific policy and the perception of the US reducing its support has stoked concerns that China could step into the space vacated by Washington.
“I think it is important that we maintain the sort of increased presence of the US in the Pacific in recent times, which has increased in proportion to Chinese interest in the area,” said Arthur Sinodinos, the Ambassador to US between February 2020 and March 2023.
Rising regional competition with China came to the fore again last week after a decision by the Cook Islands Government to sign a new strategic partnership with Beijing strained relations with New Zealand.
It was important to relate the situation in the Pacific to policies that the Trump administration will identify with and “the China card is part of that,” said Mr Sinodinos.
“If we put it in terms of, look at the progress China is making, what’s happened with the Cook Islands — we need America and Australia and New Zealand doing as much as we can in the area so it is not neglected,” he said.
The question of the US’ commitment to the region and how Canberra can best navigate the Trump administration’s upending of Washington’s longstanding global priorities is likely to loom large over foreign policy Senate estimates hearings on Thursday.
A “2025 foreign policy snapshot” released by the Government on Wednesday evening aims to outline how Australia has invested in regional relationships in the face of growing threats from a changing climate, military build-up and disruption of trade.
“Every day, Australians face confronting signs that assumptions we have relied on for generations are less assured, with international security increasingly fragile,” writes Foreign Minister Penny Wong in the introduction.
“We live in a world of increasing strategic surprise — ever more uncertain and unpredictable.”
https://thewest.com.au/politics/world-politics/usaid-australia-assesses-risks-of-strategic-funding-gaps-in-pacific-and-south-east-asia-if-trump-cuts-program-c-17857812
