USAID was more than the charity work it was known for.

The U.S. Agency for International Development (USAID) delivered food, medicine, disaster relief, and development assistance around the world. But it wasn’t charity for charity’s sake.  

When the agency was created in 1961, Congress said its purpose was, “To promote the foreign policy, security, and general welfare of the United States by assisting peoples of the world in their efforts toward economic development and internal and external security, and for other purposes.” 

In recent years, USAID also built up American influence in countries where China is now trying to dominate the minerals that power modern technology and modern militaries. 

That was until early 2025, when the Trump administration cut 90% of USAID’s contracts, dissolved the agency, and shifted the remaining functions into the State Department.  

There’s a real argument for forcing foreign aid to justify itself. Especially at a moment when Washington’s trillion-dollar deficits have America at risk of a catastrophic debt crisis, no agency should get a blank check.  

But the cancelled USAID contracts represented only $54 billion over several years, a drop in the bucket for a government that now spends over $7 trillion per year. And in exchange, the U.S. may have thrown away one of the tools it had for competing with China over critical minerals. 

What Critical Minerals Are 

Critical minerals are exactly what they sound like: minerals America cannot function without. 

The U.S. Geological Survey defines them as minerals essential to the economy or national security whose supply chains are vulnerable to disruption. That includes materials like cobalt, lithium, nickel, graphite, and rare earth elements.  

They are used in batteries, semiconductors, electric vehicles, aerospace systems, consumer electronics, weapons systems, and other industries America cannot afford to outsource to Beijing. 

Carl Coward, a critical minerals investor, put the stakes plainly on the Growth Elevated podcast. The U.S. is heavily dependent on foreign countries – especially China – for rare earths and other strategic minerals, and that dependence creates a real risk to national security and innovation. There is no serious AI, robotics, EV, or defense future without critical minerals.

Where USAID Fit In 

USAID did not own mines. It did not dig cobalt out of the ground. It did not hand America a stockpile of rare earths. 

But it did have programs aimed directly at the critical minerals problem. 

Former USAID official Kevin Ward wrote that the agency had programs “specifically designed to move global mineral supply chains out of Chinese control.” Those efforts included helping mineral-rich countries make their mining sectors more transparent, “formalizing illegal mining operations, improving traceability, and increasing enforcement of labor and environmental standards,” and expanding programming in the copper- and cobalt-rich Democratic Republic of Congo. 

That work matters because mining projects cannot succeed in countries plagued by violence, extreme poverty, or political instability. USAID grants helped bring countries to a level where businesses could operate: better infrastructure, a population healthy and well-fed enough to work, and more confidence that a new government would not seize control of the project. 

USAID staff also used their local networks to identify promising investment opportunities, helping U.S.-backed projects get a fairer shot before China locked up the field.

China’s Head Start 

China understands the strategic value of foreign aid better than almost anyone. Through its Belt and Road Initiative, Beijing has spent more than a decade financing roads, ports, railways, power plants, and other infrastructure across the developing world as a way to build influence, secure resources, and make itself the partner countries turn to first. 

All told, China spent $1.4 trillion on Belt and Road between 2013 and 2025. USAID spent just $225 billion in that same period.  

China’s lead extends to the critical mineral race, too. 

The Stimson Center, a non-partisan think tank, estimates that China spent $8-$10 billion on critical mineral projects in Africa alone in 2023. For comparison, U.S. critical mineral investment in Africa that year was under $300 million. 

To see China’s payoff, just look at the Democratic Republic of Congo. DRC produces 70% of the world’s cobalt, a key component in batteries, electronics, and military technology. And Chinese companies own or hold stakes in 80% of DRC’s cobalt mines, giving China control of the majority of the world’s cobalt production.  

When America Pulls Back 

China is already stepping in to fill some of the gaps the U.S. left behind: 

  • In Zambia, China offered 500,000 rapid HIV testing kits after the U.S. terminated a $37 million HIV/AIDS grant. 
  • In Cambodia, China gave $4.4 million to the Cambodian Mine Action Centre to dig up landmines.  
  • In Uganda, China donated $2 million in rice after USAID cuts threatened food security. 

China is sending a clear message: developing countries can count on Beijing when Washington walks away. There is no reason to think that message will stop at food aid, HIV testing, or landmine removal. In countries with the minerals America needs, it may matter even more.  

With the U.S. now spending roughly $24 billion per week just paying interest on the national debt, every federal program should be on the table. Foreign aid is no exception. 

But it is important to understand what a program actually does before cutting it. Some USAID spending was not charity for charity’s sake – it was a tool for building American influence in the exact countries where China is trying to gain the upper hand. 

To beat China on critical minerals, we cannot throw out the baby with the bathwater.