United States creates a significant power vacuum across developing nations.
The signing of the Rescissions Act of 2025 on July 24, 2025, marks a pivotal turning point in American foreign policy—one that will be studied for years as a prime example of self-inflicted strategic damage. The law, which withdraws nearly $8 billion from the U.S. Agency for International Development (USAID) and other foreign aid programs, is far more than a simple budgetary cut. It constitutes a definitive declaration of America's withdrawal from its post-war position as a global leader and the primary architect of the liberal international order.
The consequences have been harsh and immediate. USAID, which previously operated as an autonomous government agency, has been merged into the State Department, over 5,200 overseas contracts were unilaterally terminated, and thousands of development professionals were laid off. For the first time in over 70 years, this disrupted the bipartisan consensus that development assistance is a tool of American state power, critical for creating stable allies, promoting democracy, and protecting vital national interests.
By shutting down its primary soft power agency, the United States is creating a significant power vacuum in the Global South. This void will not remain unexploited. China and Russia have rapidly emerged as America’s main strategic competitors. Concurrently, several developing nations are being forced to readjust their foreign relations, altering the geopolitical landscape for decades to come.
The negative impact of this policy goes far beyond operational suspensions and billion-dollar cuts; the deepest blow is the loss of decades of accumulated institutional capital. USAID and its implementing partners served for years as a vast reservoir of local knowledge, operational capabilities, and networks of trust on the ground. In many developing countries, USAID was the most flexible and direct donor, capable of adapting to local conditions and bolstering domestic initiatives. The ability of this influence network to perceive and shape developments within a complex system is extraordinarily intricate and cannot be reconstituted quickly. Even a future administration committed to restoring funding would face severe losses in trust and human personnel. This depletion seals the erosion of American global leadership—it is a practical resignation from the world stage that America's rivals are poised to exploit.
The ideology of retreat
The dismantling of the American development apparatus is rooted in an ideological conviction that clashes directly with the U.S. post-war commitment to internationalism. For the current leadership, the abolition of foreign aid is not merely a strategic choice but a "moral" and "fiscal" necessity to correct what is presented as decades of waste and mismanagement that promoted values contrary to American interests.
This argument was bolstered by the newly formed Department of Government Efficiency (DOGE), which labeled portions of foreign aid spending as "waste and abuse." Among these were a $70,000 grant for a musical in Ireland regarding DEI, $2.5 million for electric vehicles in Vietnam, and "Green New Deal" projects in developing countries via the Clean Technology Fund.
Top administration officials have documented this ideological approach. Marco Rubio defended the near-total dismantling of USAID, arguing that the agency was accountable to the UN, multinational NGOs, and the "international community" rather than American taxpayers. He also accused USAID of fueling anti-Americanism through "woke" programs on gender and climate and funding organizations aligned with the People's Republic of China. This rhetoric transforms foreign aid from a strategic investment into a cost that contradicts proclaimed U.S. values.
The advance of competitors
The American retreat has triggered a geopolitical shift welcomed by China and Russia. Both are forming new alliances and proposing competitive models in a destabilized global order while the U.S. deconstructs critical partnerships. For much of the Global South, the Belt and Road Initiative (BRI) has now become the default solution. Beijing offers rapid, large-scale investments in ports, railways, and telecommunications without the conditions on human rights, transparency, and environment set by the West.
In Latin America and the Caribbean, the BRI has allowed China to emerge as the dominant economic force in trade. Its goal is no longer limited to raw materials but extends to the "new infrastructure" of 5G and electric vehicles. Since 2020, three out of every four dollars of Chinese investment in the Global South have formed the basis of China's growing power. However, this cooperation—largely based on unregulated debt—is a double-edged sword. Deteriorating trade balances due to subsidized Chinese imports and increased corruption from a lack of transparency create serious concerns, as seen in the anti-dumping measures in South Africa and Brazil. Despite these frictions, the strategic reality remains: as the U.S. withdraws from a comprehensive development alternative, the problematic—and often predatory—Chinese proposal is, for many, better than nothing.
Russia's manual for destabilization
Where China builds, Russia deconstructs. In the Global South, Moscow's strategy focuses less on long-term development and more on exploiting instability and supporting authoritarian regimes. In Africa, the Africa Corps—successor to the Wagner Group—is expanding its "military-business" model, securing mining contracts and offering regime protection.
A central element of this strategy is extensive disinformation. Russia has funded at least 80 disinformation campaigns in 22 African countries, aiming to amplify local grievances, rebrand itself as a defender of the oppressed, and silence pro-Western discourse. Simultaneously, Moscow is expanding its influence in Latin America through Sputnik and RT, cultivating anti-American sentiment in the name of a "multipolar world."
For the Global South, China and Russia jointly offer an authoritarian but comprehensive model: economic integration via BRI and the Digital Silk Road, and political stability through Russian security. Once, the U.S. provided this triad of development–diplomacy–defense with liberal values. Today, by refusing to offer it, the U.S. pushes countries to seek their strategic needs elsewhere. The nations of the Global South are not passive spectators; the American resignation bolsters their pursuit of strategic autonomy and diversification. India is carefully redefining its stance, seeking stability with China while maintaining cooperation with the U.S. South Africa is strengthening its multilateral orientation through BRICS, rejecting the pressure to choose sides. These moves are conscious efforts to shape a post-American order.
A high price
"America First" policies, such as the dissolution of USAID, represent a deep misunderstanding of the nature of power in the 21st century. Rather than strengthening America, they lead to its strategic marginalization. The loss of "network power" means isolation. In a world where influence is not exercised solely through military or economic might, withdrawing from the Global South makes the U.S. less powerful and less secure.
The remaining question is whether the trust, expertise, and influence lost with such speed can ever be recovered—or if the Great Resignation has already sealed a permanent downgrade of the American position in a more dangerous world.
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