Will Trump Cut Financial Aid to Jordan or Egypt?
Financial Aid: A Bargaining Tool
by Umut Akarsu
1. Context & Background
- U.S. foreign aid to Jordan and Egypt has historically been a key pillar of Washington's Middle East strategy. Egypt has received over $87 billion since 1946, with current military aid of $1.4 billion annually following the 1979 Camp David Accords. Jordan receives approximately $1.72 billion per year, making it one of the largest U.S. aid recipients in the region.
- Recently, former President Donald Trump suggested conditioning this aid on Jordan and Egypt accepting displaced Palestinians from Gaza, a move that analysts warn could reshape regional alliances. After a meeting with King Abdullah II, Trump appeared to soften his stance, but his policy unpredictability leaves room for speculation on whether financial aid cuts will materialize before March.
- Jordan is reeling from cuts of $770m in economic aid from USAID, which helped fund some Jordanian ministries, like Education and Public Works, and supported the country's water security. This funding is a major part of making Egypt and Jordan's economies function, but it also helps the U.S.'s regional agenda.
- Jordan "has long served as a pro-West partner and continues to play a stabilizing role, buffering Israel from Iran and its proxies, hosting refugees, combating terrorism and extremism, and serving as a strong and reliable ally to Western powers," according to Dima Toukan, a non-resident scholar at the Middle East Institute, who told Al Jazeera.
2. Key Indicators of a Potential Aid Cut
Trump's Rhetoric & Leverage Strategy
- Trump has a history of using financial aid as a bargaining tool, with his suggestion of reducing assistance to Jordan and Egypt unless they accept Palestinian refugees aligning with past tactics used against NATO and trade partners.
- His post-meeting shift in tone, especially praising King Abdullah II after Jordan's acceptance of 2,000 sick Palestinian children, suggests that he may back down if presented with symbolic concessions.
- After Trump at one point threatened to withdraw aid to Egypt and Jordan, in less than 24 hours later he said, "I don't have to threaten that, I don't think. I think we're above that."
Geopolitical Considerations & U.S. Interests
- Egypt and Jordan's Strategic Role: Both countries are key U.S. allies, maintaining peace treaties with Israel and acting as regional stabilizers against Iran and extremist groups.
- U.S. Military Presence: Cutting aid to either country could jeopardize U.S. military influence, as both nations host significant security cooperation programs.
- Congressional & Institutional Pushback: Trump's previous attempts to cut foreign aid faced resistance from Congress, the Pentagon, and intelligence agencies, which prioritize regional stability over short-term political leverage. Trump has shown a pattern of making aggressive threats without following through, especially in cases that might harm U.S. interests abroad.
3. Factors Suggesting Aid Continuation
Gulf & Chinese Influence as Alternatives
- Should Trump proceed with reducing aid, Jordan and Egypt may seek financial support from Gulf states like Saudi Arabia and the UAE, which have opposed Trump's displacement plan. China's increasing investments in Egypt (2025 declared the "Year of Egyptian-Chinese Partnership") indicate a growing alternative funding source.
- The U.S. has already imposed export restrictions on certain technologies to China, especially those used in high-tech industries like artificial intelligence (AI) and telecommunications. Companies have been pressured not to sell advanced chips to Chinese companies like Huawei, as part of broader efforts to contain China's technological rise. Reducing aid would risk pushing Egypt further into China's economic orbit, an outcome that Trump would likely view as a strategic loss.
- While alternative aid is possible, analysts note that filling the financial gap would be challenging, potentially forcing Egypt and Jordan into unpopular austerity measures that could lead to unrest—an outcome both countries wish to avoid, as it could destabilize their governments and affect U.S. interests.
Strategic Importance to U.S.
- Jordan's existential concerns: With a population largely of Palestinian origin, accepting another large influx could destabilize Jordan's national identity and internal security. Thus, the demographic model of the country would take a big hit, possibly resulting in tensions within Jordan's diverse population.
- Egypt's military and economic dependence on U.S. aid: The Egyptian government's close ties with the U.S. have historically guaranteed military assistance, with cuts unlikely unless the relationship deteriorates drastically.
- Security Apparatus Impacts: A sudden cut in aid could weaken counterterrorism operations and border security, negatively impacting both U.S. and Israeli interests.
4. Timeline & Predictions
Short-Term (0-6 weeks / Before March 2025)
Likelihood of full aid suspension: Low. Likelihood of minor reductions or delays: Moderate. Trump may continue using aid as leverage, but a complete cutoff is unlikely given Congressional resistance and the strategic risks involved. Trump has shown over and over again that he aggressively makes similar threats and then cools off. A more probable scenario would involve symbolic reductions, such as redirecting economic assistance rather than military aid. This could serve as a compromise strategy for the short term.
Medium-Term (6-18 months)
If Trump intensifies pressure, Jordan and Egypt may diversify funding sources. However, these countries would face significant challenges in replacing U.S. aid. Although Gulf states and China may offer financial alternatives, neither of these options would provide the same level of security and stability, making such a shift unlikely in the medium term. Aid reductions could lead to greater regional instability, pushing these nations closer to China or Gulf backers, but the U.S. would still likely maintain military assistance for strategic reasons.
Long-Term (18+ months)
The probability of permanent aid cuts depends on broader U.S. foreign policy shifts, the 2025 U.S. political landscape, and Trump's diplomatic strategies. However, maintaining military assistance aligns with longstanding U.S. security interests, which could override any plans to cut financial aid. While Trump may reduce economic aid, maintaining military assistance is likely due to the countries' strategic roles in the region, particularly as counterweights to Iran and extremist groups.
Risk Assessment
- Aid cuts could destabilize Jordan and Egypt, forcing them into economic hardship and possibly leading to increased domestic unrest. Such instability could affect both the U.S. and Israel's security interests in the region.
- Gulf states and China may exploit aid reductions to expand their influence, weakening U.S. leverage in the region. This could have long-term geopolitical consequences, particularly as China continues to expand its presence in the Middle East.
- Trump's unpredictability adds uncertainty, but historical trends suggest that complete aid withdrawal is unlikely due to bipartisan opposition in the U.S. government, as well as the risks posed by destabilizing key allies.
Final Outlook
Trump is unlikely to fully cut aid before March, but short-term reductions or symbolic financial pressures are possible. The U.S. strategic interests in Jordan and Egypt remain strong, and regional and congressional pushback makes a full withdrawal of financial support highly improbable. This once again seems like one of Trump's sudden and unhinged decisions which he didn't put much thought into. However, given the importance of both countries to U.S. regional strategy, a complete aid cut is not expected, at least in the short term.