US stops work on foreign aid after Trump orders review; Israel, Egypt exempted

Washington: The US State Department issued a "stop-work" order on Friday for all existing foreign assistance and paused new aid, according to a memo seen by Reuters, fulfilling an order issued by President Donald Trump.

The cable, drafted by the Department's Foreign Aid bureau and approved by Secretary of State Marco Rubio, said waivers have been issued for military financing for Israel and Egypt. No other countries were mentioned in the cable. Just hours after taking office on Monday, Trump ordered a 90-day pause in foreign development assistance pending a review of efficiencies and consistency with his foreign policy. But the scope of the order was not immediately known and it was unclear what funding could be cut given that the US Congress sets the federal government budget. Trump's order is unlawful, argued a source familiar discussions in Congress on the move.

"Freezing these international investments will lead our international partners to seek other funding partners - likely US competitors and adversaries - to fill this hole and displace the United States' influence the longer this unlawful impoundment continues," the source said on condition of anonymity.

The State Department memo said effective immediately, senior officials "shall ensure that, to the maximum extent permitted by law, no new obligations shall be made for foreign assistance" until Rubio has made a decision after a review.

It says that for existing foreign assistance awards stop-work orders shall be issued immediately until reviewed by Rubio.

"It's manufactured chaos," said a former senior official with the US Agency for International Development (USAID), speaking on condition of anonymity.

"Organisations will have to stop all activities, so all lifesaving health services, HIV/AIDS, nutrition, maternal and child health, all agriculture work, all support of civil society organisations, education," said the official.

Waivers

A USAID official, who requested anonymity, said officers responsible for projects in Ukraine have been told to stop all work. Among the projects that have been frozen are support to schools and health assistance like emergency maternal care and childhood vaccinations, the official said.

Across the board, "decisions whether to continue, modify, or terminate programs will be made" by Rubio following a review over the next 85 days. Until then Rubio can approve waivers. Rubio has issued a waiver for emergency food assistance, according to the memo. This comes amid a surge of humanitarian aid into the Gaza Strip after a ceasefire between Israel and Palestinian militants Hamas began on Sunday and several other hunger crises around the world, including Sudan. The State Department memo also said waivers have so far been approved by Rubio for "foreign military financing for Israel and Egypt and administrative expenses, including salaries, necessary to administer foreign military financing."

Israel receives about $3.3 billion in foreign military financing annually, while Egypt receives about $1.3 billion

Other states identified for such financing in 2025 include Ukraine, Georgia, Estonia, Latvia, Lithuania, Taiwan, Indonesia, the Philippines, Thailand, Vietnam, Djibouti, Colombia, Panama, Ecuador, Israel, Egypt and Jordan, according to a request to Congress from former President Joe Biden's administration.

That request also said foreign military financing would "also seek to bolster the Lebanese Armed Forces' ability to mitigate instability and counter malign Iranian influence."

The Lebanese military is currently trying to deploy into the south of the country as Israeli troops withdraw under a ceasefire deal that requires Iran-backed Hezbollah weapons and fighters to also be removed from the area.