U.S. Aid Cuts in the Pacific: A Strategic Vacuum and Rising Chinese Influence

In late January, just a week after Donald Trump resumed his presidency, a significant email landed in the inboxes of FHI 360, a non-profit organization operating in Papua New Guinea (PNG). This email signaled an abrupt halt to their work under the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR), funded through the U.S. Agency for International Development (USAID). The Trump administration, under the leadership of tech billionaire Elon Musk, aimed to dismantle USAID, branding it a “cesspool of fraud, waste, and wokeness.”

Immediate Impact on Health Services

FHI 360, formerly known as Family Health International, was left with no choice but to cease its operations, which included crucial services like patient tracking, data entry, and community engagement for HIV testing. According to Poruan Temu, the regional director based in Port Moresby, the organization experienced a staggering 70% drop in HIV testing and a 90% reduction in access to prevention services like pre-exposure prophylaxis (PrEP).

The ramifications of these cuts are dire. PNG has seen a dramatic rise in HIV infections, with new cases reaching 11,000 in 2024-double the number reported in 2010. Alarmingly, nearly half of these new infections are among children and young adults under 25. In response to this escalating crisis, the PNG government declared an HIV emergency on June 26, 2024.

A Broader Geopolitical Context

The sudden cessation of USAID funding has sent shockwaves not only through PNG but across the Pacific region. The immediate effects are evident in the disruption of frontline health services, with essential supplies like food and nutritional paste piling up in U.S. warehouses, unable to reach those in need. However, the broader question looms: as the U.S. retreats, who will fill the void?

China emerges as a clear contender. Over the years, it has invested billions in the Pacific, funding infrastructure projects such as roads, schools, and bridges, often through controversial loans. This shift in influence poses a significant challenge for Australia, the largest aid donor in the Pacific, as it navigates its strategic competition with China.

A report from the Centre for Strategic and International Studies (CSIS) highlights that American actions, including Trump’s tariffs, have not only harmed perceptions of the U.S. but have also created an opportunity for China to position itself as a reliable partner in the region. Charles Edel, a CSIS Australia chair, noted that the U.S. has left many in the region “scratching their heads” about its commitment to a region deemed vital for national security.

The Fallout of U.S. Aid Cuts

The CSIS report further indicates that many Pacific nations, including PNG, Vanuatu, Fiji, Palau, and the Solomon Islands, have lost 100% of their USAID funding. This has prompted countries like Australia to reassess their own aid strategies in the region. Concerns have even been raised by some of Trump’s Republican allies, including Congresswoman Young Kim, who warned that Chinese President Xi Jinping is poised to exploit any U.S. vacuum.

In recent weeks, Australia faced challenges in securing security pacts with both Vanuatu and PNG, raising questions about the potential influence of China in these negotiations. During a visit to Australia, Kurt Campbell, a top Indo-Pacific adviser to President Joe Biden, emphasized the strategic importance of the region and the relentless nature of Chinese engagement.

The Strategic Implications for the U.S.

Michael Schiffer, a former assistant administrator of USAID, expressed concerns that the reduction in foreign assistance would severely undermine U.S. strategic interests in the Pacific. He noted that military contacts have voiced worries about the implications for the Indo-Pacific Command, which is responsible for defending U.S. interests in the region. Schiffer stated, “Beijing is going to look to where it can fill the void,” emphasizing that Pacific nations will turn to China out of necessity.

Lisa Curtis, director of the Indo-Pacific program at the Centre for a New American Security, echoed these sentiments, arguing that drastic cuts to U.S. foreign aid are damaging to American global power and influence, particularly in deterring China.

China’s Opportunistic Engagement

The CSIS report highlights a shift in the narrative surrounding China’s engagement in the Pacific. While there has been persistent discomfort regarding China’s self-interested approach, the perception is changing. Chinese diplomats have seized the opportunity to portray the U.S. as unreliable. For instance, the Chinese ambassador to PNG, Yang Xiaoguang, labeled Trump’s tariffs as “economic bullying” and positioned China as Port Moresby’s “most reliable partner.”

In August, the Chinese embassy in Port Moresby hosted a bilateral trade meeting, further solidifying its presence in the region. Yang’s article in PNG’s major newspapers criticized the U.S. for prioritizing its interests over multilateralism, framing China as a champion of global cooperation.

Australia’s Response to the Changing Landscape

The U.S. drawdown and China’s assertive posture have underscored the necessity for Australia to reaffirm its role as a reliable partner in the Pacific. Foreign Minister Penny Wong addressed the Pacific Islands Forum in May, acknowledging the growing uncertainty in the region due to global aid cuts and climate change. She emphasized that Australia is a partner the Pacific can count on, pledging to dedicate 75 cents of every Australian development dollar to support the region.

In June, after months of uncertainty, FHI in PNG received confirmation that some of its programs were deemed life-saving and could resume. Temu reported a rebound in the number of people accessing care, although the focus has shifted primarily to treatment rather than prevention.

Conclusion

The cuts to U.S. aid in the Pacific have created a strategic vacuum that China is poised to fill, raising concerns about the long-term implications for regional stability and U.S. influence. As the Pacific grapples with rising HIV infections and other pressing health issues, the need for reliable partnerships and sustained aid becomes increasingly critical. The evolving geopolitical landscape necessitates a concerted effort from both the U.S. and its allies to reaffirm their commitments to the region, ensuring that the Pacific nations are not left to navigate these challenges alone.