Interviews
Trump administration has good reason to re-evaluate American aid
It may increase pressure on South Asian states to reduce their reliance on China. I also anticipate considerable continuity with Biden on country-specific approaches.
Biswas Baral
Michael Kugelman is the Director of the South Asia Institute at the Wilson Center, a Washington DC-based think tank mandated by the US Congress to offer counsel and insights on global affairs to American policymakers. In this interview with the Post’s Biswas Baral, Kugelman discusses America’s South Asian policy under Trump and how it will be different to what it was under President Biden.
These are early days of the second Trump administration. Still, do we have a rough idea of what kind of policies it will pursue in South Asia?
Trump didn’t say much on the campaign trail about South Asia, aside from some comments about India and Afghanistan here and there. As a region, it won't be top on the administration’s list of strategic priorities.
That said, one can confidently make several assumptions. The Indo-Pacific policy, which Trump formulated during his first term, will likely remain the core US policy in Asia, and with the same purpose—to counter China, mainly by offering Indo-Pacific states alternative investments to what Beijing has provided. Trump’s administration may increase pressure on South Asian states to reduce their reliance on China.
I also anticipate considerable continuity with Biden on country-specific approaches. India will continue to be viewed as America’s top partner in the region. There will be relatively little engagement with Afghanistan and Pakistan.
With the other countries, including Nepal, there will likely be similar levels of engagement compared to the Biden era. Relations with these nations will likely be pursued through a great power competition lens. One exception, where we can expect considerable change, is Bangladesh. The Trump administration will not want that relationship to focus on providing assistance for democratization and reforms, which was how things were with the Biden administration.
One key unknown will be foreign assistance. Many countries in South Asia, including Nepal, receive sizable amounts of US aid. The current aid freeze raises questions about future development partnerships between the US and South Asian states.
What do you make of the administration’s decision to suspend foreign aid, including for Nepal through USAID? Will this kind of policy backfire?
The administration has good reason to pause and look into whether assistance is truly being used to address US interests; it is US taxpayer money, after all. There has often been criticism of US foreign assistance programs—both in the US, where many have said it’s not being spent in the ways it should, and in recipient countries, where many have said it doesn't solve the problems it’s meant to solve.
In a South Asia context, though, where many vulnerable individuals, including in Nepal, have benefited from US assistance, there could be immediate effects for local communities. Additionally, if the aid isn't eventually resumed, there could be notable implications for US bilateral relationships in the region. Not to mention, there could be economic consequences for a large number of locals working for US aid agencies.
In many countries in South Asia, USAID has had a major presence and development has been a longstanding area of partnership. Ultimately, this could put pressure on other key providers of development aid in the region—the EU, the UK, Japan, and South Korea, among others—to step up their own assistance.
According to the US Immigration and Customs Enforcement (ICE), 1,365 Nepalis have received final orders for removal. Do you think they will be swiftly deported? How easy will such deportations be, legally?
Deportation orders will likely face legal challenges, but the administration appears committed to see them through, with an expectation that foreign governments will take back their undocumented nationals currently in the US. Foreign governments may also face the risk of tariffs or other measures if they don’t agree to take back undocumented immigrants. This helps explain why some countries, including India, have moved preemptively and publicly said they will look into taking back immigrants.
The US and India have of late worked closely in multiple fields. Do early signs suggest the robust partnership will continue or are there signs of strain, for instance over deportation of illegal Indian nationals from the US?
The US relationship with India should be fine. Trump is a strong proponent of the partnership, and he’s brought some of Washington’s biggest champions of friendship with India—including his national security advisor and secretary of state—into his administration. Trump has a strong chemistry with Modi. And the two are both keen to work together to counter China, in pursuit of the US Indo-Pacific policy.
Additionally, some tension points from the Biden era will subside. Trump’s less hawkish position on Russia means Delhi should face less pressure from Washington to reduce its ties with Moscow. And Trump likely won’t focus on India’s rights and democracy record.
There will also be some points of tension, though. India could face tariffs—though it may also use that threat as an opportunity, to propose a new economic agreement that reduces tariffs on both sides. And while India has pledged to take back undocumented Indian workers in the US, the sheer volume of them—more than 700,000, the third largest such group in the US—will present challenges for Delhi.
Trump’s policies on visas and immigration could also impact US-India tech cooperation, a key growth space for partnership in the Biden era. Another fast-growing area for cooperation in recent years—clean energy and climate change—likely won’t be among Trump’s priorities.
Ultimately, there will be challenges, but on the whole, it’s hard to imagine the US-India relationship suffering in a big way, given the many areas of convergence and the administration’s firm desire to make things work with New Delhi.
How is the new US-China dynamic likely to unfold in South Asia? Will the Trump administration see Chinese engagement in South Asia differently than did the Biden administration?
Generally speaking, there will be continuity, because the Trump administration will likely maintain the Indo Pacific Strategy and deploy it in South Asia in a similar way to the Biden administration, with the goal of giving the region an incentive to rely less on China. The Biden administration sought to do this with tools like the Development Finance Corporation—and in Nepal, with the MCC—that sponsored infrastructure projects.
There may be several differences between the two leaders’ approaches. The Trump administration, with many strong China hawks in it, may be willing to put more pressure on the region than did the Biden administration (though the Biden administration took quite a tough line on Beijing as well). Additionally, the Trump administration may look to offer different types of investments to the region than did Biden: Less of a focus on clean energy technology, for example, and more focus on hard infrastructure.
All this said, there is a key factor of uncertainty here: We don’t know exactly what Trump’s approach to China will be. He may push forward with the current competition. But he also may try to reach an agreement with Beijing to ease tensions and reduce competition. After all, he doesn’t want the US to get dragged into a conflict with Beijing.
If his administration does reach an understanding with China that eases tensions, this would likely mean that the region’s capitals would feel less pressure to distance themselves from China. Another possibility is that Trump looks to ease security and strategic competition with China, but continues to push forward with economic competition.
If so, the pressure would likely remain in place, because putting pressure on the region to do less with China is really about getting the region to opt for US-sponsored development, connectivity, and tech initiatives over Chinese ones.
How will American engagements with smaller South Asian states change under the new administration?
It will largely be the same, with the great power competition lens deployed in a big way. Though there will be differences, with the expectation that the Trump administration will provide much less (and possibly no) development assistance. Some of the Biden administration focus areas in the region (clean energy and climate change mitigation) will likely be deemphasised as well.
Also, given the Trump administration’s transactional approach, and Trump’s broader interest in investment, if the administration identifies a useful opportunity for financial engagement in some type of attractive sector in a particular country, then this could be a potential new hook for cooperation.
What about the new Trump presidency worries you the most, vis-à-vis South Asia?
South Asia has a lot of strategic significance owing to its critical location, its economic growth, and its youth bulge, among other factors. It’s also especially vulnerable to the most serious challenges of our time, like climate change and pandemics and terrorism.
These are realities that the Trump administration might overlook, in favour of its transactional approach. This means that opportunities to shore up ties with a key region, and to help it address critical challenges, could be squandered.