The announcement of the dismantling of the United States Agency for International Development (USAID) has caused a significant impact in Guatemala and throughout the Central American region. This measure, promoted under the “America First” policy of the Trump administration and announced on February 3, 2025, by Elon Musk, director of the Department of Government Efficiency (DOGE), marks the end of an era in U.S. international cooperation.
Since its creation in 1961, USAID has been a key pillar in implementing development policies in Guatemala, allocating more than $2.421 billion in assistance between 2001 and 2024. These funds have been crucial in strengthening areas such as education, health, security, humanitarian aid, and economic development. With the abrupt suspension of the agency, hundreds of projects are now in limbo, while the Guatemalan government seeks alternatives to fill the void left by this decision.
Economic and Social Impact of USAID’s Suspension in Guatemala
The closure of USAID not only represents a reconfiguration of U.S. foreign policy but directly affects key sectors in Guatemala. According to data from the government site foreignassistance.gov, in 2024, USAID’s main areas of investment in the country included:
- Democracy, human rights, and governance: $49.15 million
- Economic development: $45.63 million
- Support programs: $29.78 million
- Humanitarian assistance: $27.59 million
- Health: $17.82 million
- Peace and security: $12.16 million
- Education and social services: $12.67 million
The sudden withdrawal of these funds has affected programs focused on violence prevention, governance strengthening, and poverty reduction in both rural and urban communities. Additionally, the agricultural sector, which benefited from initiatives such as the Sustainable Alliances for Innovation, Research, and Entrepreneurship (ASPIRE) project, is now vulnerable. This program, developed in collaboration with the Guatemalan Exporters Association (AGEXPORT), aimed to improve the value chains of products such as cardamom, avocado, cocoa, and essential oils, allowing small producers to access international markets.
Likewise, the interruption of health programs has raised concerns among local organizations. Funds allocated to HIV treatment, chronic disease care, and prevention campaigns have been suspended, primarily affecting at-risk populations. Particularly, the program executed by Lambda, which worked on HIV prevention and services for the LGBTI+ community, has suffered from misinformation spread by the Trump administration. The administration falsely claimed that USAID allocated $2 million to sex reassignment surgeries, when in reality, the funds were used to strengthen healthcare programs.
The New U.S. Cooperation Approach in Guatemala
During his recent visit to Guatemala, Secretary of State Marco Rubio met with President Bernardo Arévalo to discuss the restructuring of bilateral cooperation programs. In this meeting, the U.S. reaffirmed its commitment to supporting counter-narcotics efforts, illegal human trafficking prevention, border security, and migration deterrence.
However, Rubio made it clear that U.S. foreign assistance will be re-evaluated and aligned with the country’s strategic interests, meaning that many previously funded projects could disappear entirely. During a meeting with USAID employees in Guatemala, the Secretary expressed his stance on the agency:
“Foreign aid is the least popular thing the government spends money on. And I have spent much of my career defending and explaining it. But it is becoming increasingly difficult to do so across the board.”
This suggests that the U.S. will prioritize projects related to security and migration control, rather than social, educational, and community development initiatives.
USAID’s Closure and the Legal Battle in the U.S.
The dismantling of USAID has been met with resistance in the U.S. Congress and from various civil society organizations. Since the agency was created by Congress in 1961, its closure cannot be implemented solely by executive decision.
On February 7, Federal Judge Carl Nichols issued a temporary order to halt the suspension of contracts for 2,200 USAID employees while the legality of the measure is reviewed. Two federal employee unions have argued that Trump’s decision violates administrative procedures and requires legislative approval.
Despite this legal setback, the Trump administration has maintained the suspension of cooperation funds, creating uncertainty about the agency’s future. The U.S. Congress is expected to debate USAID’s continuity in the coming months, which could determine the fate of American international assistance programs.
What’s Next for Guatemala?
With USAID’s suspension, Guatemala faces the challenge of restructuring its relationship with the U.S. and seeking new sources of funding for its social and economic programs. The Arévalo administration has expressed its commitment to ensuring the continuity of the most urgent projects, but the lack of resources poses a significant challenge.
Economist Ricardo Barrientos, director of the Central American Institute for Fiscal Studies (ICEFI), warned about the implications of these budget cuts:
“There is an entire non-governmental sector that has supplemented the state’s deficiencies. For example, in HIV care or other chronic diseases. These cuts show us what the state is failing to address.”
Barrientos also pointed out that cooperation programs have supported independent media and research centers, which will now struggle to operate without financial backing.
The closure of USAID in Guatemala represents a turning point in U.S.-Guatemala relations and the future of international cooperation. While the Trump administration seeks to redirect funds toward security and migration objectives, Guatemala must find alternative strategies to sustain vital sectors like education, health, and economic development.
As the debate over USAID’s future unfolds in the U.S., Guatemala must explore new partnerships with international actors and strengthen internal capacities to ensure the well-being of its population. The outlook remains uncertain, but one thing is clear: the end of USAID marks the beginning of a new phase in diplomacy and foreign assistance in the region.