President Trump’s Stop-Aid Order Squeezes Zelensky – Cameron Curtis
Background: The Stop-Aid Executive Order
On January 20, 2025, President Trump signed an order that stopped the global flow of US foreign aid for 90 days. The order, available here WH – President Trump’s Stop-Aid Order, affects all countries except those for which the US Secretary of State, Marco Rubio, signs an explicit waiver.
Secretary Rubio issued a follow-up memorandum on January 26. Available here State: Secretary Rubio’s Implementation Memorandum, the memorandum addresses the implementation of President Trump’s January 20 order.
The Stop-Aid order affects all countries receiving US aid, including Ukraine. Specific waivers were granted to two countries – Israel and Egypt. Globally, the Stop-Aid order caused panic in USAID and the State Department. In the six days between the initial order and Secretary Rubio’s memorandum, the White House and State Department were besieged by requests from US officials in Ukraine for an exemption. The requests were denied.
Ukraine is by far the largest recipient of US aid. Figure 1 shows the volume of US aid to the largest recipient countries.
Figure 1. Top recipients of US Foreign Aid in 2023
The key comparables are Ukraine, Israel, Egypt, and Jordan. Keep an eye on those. Israel and Egypt have been exempted from the order.
It is also purposeful to note the difference between military aid (blue bars) and civilian aid (gray bars).
Initial Impact on Ukraine
As one might expect, the first days following the issuance of the order were chaotic. Once US officials in foreign countries got over the shock, they scrambled to determine what was covered and what was not. In the case of Ukraine, the big question was, “Will military aid be affected?”
Background: The Stop-Aid Executive Order
On January 20, 2025, President Trump signed an order that stopped the global flow of US foreign aid for 90 days. The order, available here WH – President Trump’s Stop-Aid Order, affects all countries except those for which the US Secretary of State, Marco Rubio, signs an explicit waiver.
Secretary Rubio issued a follow-up memorandum on January 26. Available here State: Secretary Rubio’s Implementation Memorandum, the memorandum addresses the implementation of President Trump’s January 20 order.
The Stop-Aid order affects all countries receiving US aid, including Ukraine. Specific waivers were granted to two countries – Israel and Egypt. Globally, the Stop-Aid order caused panic in USAID and the State Department. In the six days between the initial order and Secretary Rubio’s memorandum, the White House and State Department were besieged by requests from US officials in Ukraine for an exemption. The requests were denied.
Ukraine is by far the largest recipient of US aid. Figure 1 shows the volume of US aid to the largest recipient countries.
Figure 1. Top recipients of US Foreign Aid in 2023
The key comparables are Ukraine, Israel, Egypt, and Jordan. Keep an eye on those. Israel and Egypt have been exempted from the order.
It is also purposeful to note the difference between military aid (blue bars) and civilian aid (gray bars).
Initial Impact on Ukraine
As one might expect, the first days following the issuance of the order were chaotic. Once US officials in foreign countries got over the shock, they scrambled to determine what was covered and what was not. In the case of Ukraine, the big question was, “Will military aid be affected?”
President Zelensky was at pains to remark in the first few days that “Military aid is not affected, thank God.”
Now that almost two weeks have passed, we are better able to assess the situation. It is safe to say that all civilian aid has been frozen. Military material procured during the Biden administration’s last desperate spending spree will probably continue to flow. It is unclear what will happen to military aid when Biden’s largesse runs out. There is also the matter of $4 billion in congressional authority that the Biden administration was not able to spend. It is unclear whether the Trump administration will release that money to Ukraine.
Impact on Peace Negotiations
President Trump issued the Stop-Aid order as part of a larger initiative to rationalize what he views as US spending that is out of control. He is particularly concerned that much of the spending on foreign aid is not aligned with the interests of the United States. Methinks some redistribution is in the cards.
While the Stop-Aid order was not issued to impact Ukraine peace negotiations, it is having an impact. President Trump cannot sign a deal on behalf of Ukraine. Any peace deal must be signed between Russia and Ukraine.
Last week, President Trump threatened Russia with sanctions, tariffs, and taxes if it did not end the war.
However, as President Trump says, “It takes two to tango.” While President Trump tells reporters that “Zelensky wants a deal,” Zelensky continues to speak about joining NATO, bringing NATO troops to Ukraine, and recovering Ukraine’s lost territory. These are the very reasons Russia went to war in the first place.
Such utterances cast doubt on Zelensky’s desire to negotiate a lasting peace. Whenever Zelensky speaks of “peace through diplomacy,” he means the US and NATO forcing Russia to withdraw to the Pre-2014 borders. In the current military environment, this does not appear realistic.
The Stop-Aid order is a powerful lever to encourage Zelensky to be reasonable. It is now broadly accepted that Ukraine will have to give up territory to secure peace (along the lines of the “Istanbul Plus” formula). Moreover, polls show that 80% of Ukrainians are supportive of such a peace. Zelensky has yet to accept this.
Just about every dime spent in Ukraine comes from loans or direct transfers from the US and Greater Europe. The interest on loans made to Ukraine is paid for by grants from the US. The salaries of Ukraine’s soldiers and public servants are paid for by the US. As such, the income taxes Ukraine collects from its citizens also come from direct transfers from the US and Europe.
Ukrainian media is a pointed example. In 2022, Zelensky shut down all independent media. The remaining Ukrainian media outlets all conform to Zelensky’s party line. Within hours of the Stop-Aid order, Ukrainian news media were thrown into a panic. It turns out that 90% of Ukrainian news media are funded by USAID under the Biden administration’s Samantha Power. Ukrainian media is now racing to secure funding from Greater Europe, charities, and online funding vehicles.
The funding squeeze on Ukraine has yet to fully play out.
As a footnote, President Trump is in no hurry to appoint a permanent replacement for Samantha Powers as head of USAID. Sixty senior USAID officials have been placed on leave for “actions…designed to circumvent the President’s Executive Orders and the mandate from the American people.” Elon Musk and CNN have reported that USAID officials have been placed on leave for attempting to physically prevent DOGE access to USAID systems. There are rumors that USAID will be dissolved and its programs rolled into Secretary Rubio’s State Department. Figure 2 is rather telling.
Cameron Curtis has spent thirty years in the financial markets as a trader and risk manager. He was on the trade floor when Saddam’s tanks rolled into Kuwait, when the air wars opened over Baghdad and Belgrade, and when the financial crisis swallowed the world. He’s studied military affairs and warfare all his adult life. His popular Breed series of military adventure thrillers are admired for combining deep expertise with propulsive action. The premises are realistic, the stories adrenaline-fuelled and emotionally engaging.
