Welcome to Talking Points!

Blog Post #6, 3-17-2025, “Foreign Aid and Trade”

Hello and welcome to the sixth post of Talking Points! A key motive for President Trump’s termination of foreign aid, the imposition of tariffs, and its the targeting of relationships with the allies, is the concept that the United States has had other countries taking advantage. Considering that these actions represent a major element of…

Hello and welcome to the sixth post of Talking Points! A key motive for President Trump’s termination of foreign aid, the imposition of tariffs, and its the targeting of relationships with the allies, is the concept that the United States has had other countries taking advantage. Considering that these actions represent a major element of President Trump’s foreign policy, understanding these claims and the resulting actions, becomes critical. To this end, we will examine the Cold War and the policy of containment, how it relates to conventional American foreign policy, and how his actions will impact both the United States and the larger world. In doing so, I hope to demonstrate that rather than altering it completely, if President Trump perceives conventional American foreign policy as deficient, he should work within the system to reform it, rather than replacing it entirely.

In the wake of the Second World War, the world was left with two dominant but opposing superpowers, the United States and the Soviet Union. Seeking to inform the American government about what he saw as Soviet goals and behavior, George Kennan sent the “Long Telegram” in 1946. This document, written when he was a diplomat in Moscow, stated that the Soviet Union, while participating in some postwar international institutions, would work to expand the influence of its ideology of communism. However, he also believed that those regions not under communism were collectively stronger than the Soviet Union. Therefore, it was his conclusion that the United States should lead a coordinated effort to contain communism, to prevent it from spreading. This policy, known as containment, would be the basis of American foreign policy for several years, and has influenced American foreign policy, even to this day.

As part of its policy of containment, the United States enacted the Marshall Plan from 1948 to 1951, which transferred a total of 13.3 billion dollars, about 133 billion dollars in today’s money, to support the rebuilding of Western Europe. This program, demonstrates two of the primary elements of America foreign policy, the integration of allied countries into an American-led free trade system, and the use of foreign aid to gain the goodwill of struggling countries. It accomplished the first objective through the requirement that countries receiving aid must eliminate trade barriers, and the second objective through the actual aid it provided. It was believed that Soviet influence in postwar Western Europe could be limited, as the war-torn countries of Western Europe would not need to rely upon the Soviet Union for foreign trade and economic support. Indeed, the Soviet Union established its own bloc in countries it had occupied during the Second World War, forming friendly governments in Poland, Hungary, and East Germany, among others.

However, to limit Soviet influence was not enough, preparation would need to be made in case of a Third World War, with the Soviet Union. In preparation for such a war, American military forces were stationed in Western Europe, chiefly under the umbrella of the North Atlantic Treaty Organization. The North Atlantic Treaty Organization, otherwise known as NATO, was established to prevent such a war through collective security. Effectively, every member of NATO, should they be attacked, will be defended by every other member of NATO. Therefore, the hope was that aggression against the United States, Canada, and Western Europe, by the Soviet Union, would be deterred, by forcing the Soviet Union to contend with every NATO member. Furthermore, NATO as a whole could benefit from the strategic advantages of any one member. For example, Iceland, despite lacking armed forces, was a founding member of NATO, its location allowed NATO forces deployed to it to observe Soviet military activities in the Arctic.

Although the Cold War is over, these policies originally intended for the containment of Communism, have continued. Conventional foreign policy has been to develop free trade under a US-led system, working to develop a positive business environment for American businesses, establish peace through economic interconnectedness, and increase American influence through participation in its financial system. In addition, the US has provided extensive development aid in order to increase global security, stimulate economic growth in economic countries, and build influence with developing countries. Finally, the US has continued to station military forces in its allies worldwide, guaranteeing the security of its allies, providing a symbol of American dominance, and utilizing its bases to develop a logistical network that can facilitate operations worldwide.

Even after the Cold War, the US has continued to develop a global financial and trade system emphasizing free trade. For example, the United States supported the creation of the World Trade Organization, becoming one of its founding members, in 1995. This organization was established to help regulate trade between its members, and in doing so, eliminate trade barriers such as tariffs. In addition, it should also be noted that the Bretton Woods system of monetary management, which was established by the US and its allies during the Second World War, contributed to the position of the US Dollar as the world’s reserve currency. Effectively, this means that countries, foreign businesses, and foreign banks hold US dollars, and conduct international trade in US dollars. Therefore, I would argue that the current global financial system is a direct result of US policy, and that the United States cannot alter the system without considerable harm.

The Second World War also resulted in a process of decolonization, chiefly in Africa and Asia. European colonial powers like the United Kingdom, France, and Portugal largely lost control of their colonial empires during the Cold War. These new countries struggled due to poor economic systems, internal conflict, and bad political systems. As a result of this, both the United States and the Soviet Union vied for influence over these countries, providing economic, humanitarian, and security assistance, in exchange for cooperating with their goals. To this end, in 1961, President Kennedy established the United States Agency for International Development, responsible for administering such assistance. Although the Cold War has ended, the United States has continued supplying development and humanitarian assistance to countries throughout the world, including former colonies in Africa and Asia. For example, in 2023, USAID disbursed 12 billion dollars to sub-saharan Africa, supplying food, medical care, infrastructure development, and business assistance. The freezing of such aid under President Trump, represents a fundamental shift in American foreign policy, as it is the largest donor of foreign aid worldwide.

The United States has continued to maintain numerous military bases worldwide, for the sake of the security of its Allies, its position within the world, and for the execution of its national security and military policy. For example, South Korea continues to house numerous US military bases. These bases and the forces located on them prevent North Korea from attacking South Korea, provide a signal that the US is actively involved in the security of Asia, and help support the missions the US undertakes in countering its enemies in Asia, particularly China. The same goes for the numerous military bases in Poland, which help protect Poland from Russia, and the various bases throughout Middle Eastern countries like the UAE, Qatar, and Saudi Arabia, which help protect those countries from Iran. In addition, the military bases the US has in Poland support American operations to counter Russia, and the Middle Eastern bases support American operations to counter Iran and terrorism. Thus, if the US were to cease the operation of its overseas military bases, it would lose a major element of its own security, the security of its Allies, and global security.

Despite these advantages, there is no doubt that American foreign policy is imperfect to say the least. The promotion of free trade has allowed inexpensive foreign imports, damaging American industry. Foreign aid has struggled to improve economic development worldwide. The overseas military bases that the US operates are extremely expensive, costing the American taxpayer hundreds of millions. However, the US engages in each of these activities because it decided that it wanted to be at the forefront of the postwar world. Thus, these elements have become cornerstones on how the world sees America. Any kind of major reform to American foreign policy, taken so quickly would no doubt spread chaos, as countries would have to quickly reevaluate their position in the world’s financial and trade system, to account for the lack of aid that was expected, and to adapt their own security without the US. Therefore, if President Trump is going to fundamentally change American foreign policy, in needs to be done carefully and slowly, in order to prevent this chaos.

Leave a comment