Trump keeps threatening to end foreign aid for disloyal countries. Here's why it hasn't happened.

UNITED NATIONS — President Trump revived one of his favorite talking points on Tuesday in an address at the U.N. General Assembly as he called for an end of foreign aid to countries that disrespect the United States.

“Moving forward, we are only going to give foreign aid for those who respect us and, frankly, are our friends,” Trump told world leaders in New York. “Few give anything to us, that is why we are taking a hard look at U.S. foreign assistance.”

The populist ultimatum has been a frequent applause line at Trump rallies and speeches since the early days of his presidential campaign. But turning it into an actual policy has proven much more difficult, U.S. officials familiar with internal debates said ahead of Trump’s U.N. speech.

For several weeks, a senior official at the National Security Council, Kevin Harrington, has led a review of U.S. foreign aid policy aimed at putting into practice Trump’s “America First” mantra and adjusting foreign aid priorities in the budget for fiscal year 2020.

In the process, he has faced stiff resistance from officials at the Pentagon, State Department and U.S. Agency for International Development who said his proposals were counterproductive, contradictory and could cede influence to China, according to senior U.S. administration officials familiar with the meetings.

Some of the proposals include revoking assistance to countries that do not vote with the United States at the United Nations and those that have developed strong financial ties to China, and providing loans to countries instead of grants, said the officials, who spoke on the condition of anonymity to discuss internal deliberations.

[At U.N., Trump rejects constraints imposed by other nations]

The disagreements culminated in a “deputies committee” meeting earlier this month in which the No. 2 officials in U.S. agencies and departments failed to reach consensus, sending the foreign aid review back down to a lower policy coordinating committee.

“Everyone agrees that foreign aid should be reformed, but the tactics Kevin Harrington has laid out have very little support in the interagency,” said a senior U.S. official familiar with the meetings.

The White House and State Department declined to comment. Harrington did not respond to requests for comment.

A key tension in the foreign aid review has been balancing two of its main priorities: Reserving U.S. financial assistance for America's “friends,” while addressing China’s growing clout in the developing world, where it has doled out hundreds of billions of dollars in loans for construction projects involving ports, roads, railways, bridges and power grids. Beijing’s support for cash-strapped governments has been linked to favorable terms for natural resources extraction or votes against Western-backed resolutions that are critical of China’s human rights practices, experts say.

Trump has proven particularly interested in offering loans instead of grants, a senior U.S. official said. The president frequently asks advisers what the United States is getting in return for aid and has become convinced that U.S. money is going to pay off debts that other countries owe to the Chinese, they said.

The challenge, some officials argued, is that the United States risks losing influence to China if it only works with outwardly pro-American countries.

“They seem to be implying that we’re trying to counter China, and in the same breath, Kevin implies that we should just withdraw in all the places that don’t vote with us all the time,” the senior U.S. official said. “I don’t know what it means to both counter China and cede territory to it.”

On China, both Republican and Democratic administration have struggled to counter Beijing's “checkbook diplomacy,” known for overlooking the human rights practices of other governments in pursuit of a transactional relationship. In July, Secretary of State Mike Pompeo announced a new $113 million program for investments in Asia focused on technology, energy and infrastructure. Though meant to serve as a counterweight to China’s One Belt, One Road investment project, it represents only a tiny fraction of the money Beijing offers developing countries.

To make up for the imbalance, senior U.S. officials have tried to make the case that “predatory” Chinese lending practices leave developing countries worse off than U.S. development assistance.

“It offers easy money, it offers quick projects. It offers availability and responsiveness in the sense of being able to act quickly. But it also secures conditions and indebtedness that I would argue essentially mortgage a country's future,” Mark Green the administrator of USAID, said in a June speech at the Brookings Institution.

The review is one of the most substantive efforts associated with Harrington, a Washington outsider and longtime associate of Peter Thiel, the Silicon Valley billionaire who co-founded PayPal and donated heavily to Trump’s presidential campaign.

As the review has gone on, Trump's aides have tried to influence the debate in different ways. White House officials supportive of extensive foreign aid have brought in business figures like Bill Gates to the Oval Office, who have tried to convince Trump that foreign aid is good for the country’s foreign interests and business interests.

Trump has repeatedly argued that wealthy countries in the Middle East should be helping their neighbors instead of relying on the United States. The president is expected to bring up complaints about foreign aid with world leaders this week, a senior White House official said.

Historically, U.S. aid has never been totally divorced from political considerations, but tying it directly to loyalty remains controversial even among conservative scholars.

“Linking humanitarian and security aid to support of U.S. policy priorities would undermine the purposes and effectiveness of that aid,” said Brett Schaefer, a senior research fellow at the conservative Heritage Foundation.

He doubted, however, that Trump's rhetoric will become the actual policy of the Trump administration, which Congress would also have to approve. In January, Trump called on lawmakers to pass legislation that ensures American foreign-assistance dollars “only go to America’s friends.” The call went nowhere, and senior Republican aides in Congress said they had not even heard of Harrington's review of foreign aid.

“Based on my understanding, discussions of this policy in the administration” might consider U.N. voting as an “important factor, but not the only factor, in aid allocation,” Schaefer said.

For aid groups, the question of how to categorize which countries are loyal and which aren't remains mystifying. “In every African country there is some anti-American sentiment,” said Paul O'Brien, the vice president for policy and advocacy at Oxfam America. “The question is: By doing the right things in the most effective way can we bring more people to understand what America stands for?”

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