The Trump administration’s zeal for freezing federal aid should worry insurers

When a convicted fraudster decries aid programmes around the world as “fraud”, you know the gaslighting by US president, Donald Trump, has reached a new level.

The US Agency for International Development (USAID) quickly became a significant target for false claims when Trump re-entered the White House. His administration immediately issued an executive order imposing a 90-day freeze on all US foreign development assistance.

The damage caused by this attack on the largest aid agency in the world, with a presence in 100 low- and middle-income countries, is immeasurable. As an expert comment by Chatham House reads, “the USAID shutdown will have wide-reaching but potentially not so visible effects, because the constituencies affected are not powerful”.

Thanks to chainsaw-wielding Elon Musk’s government “efficiency” drive, USAID’s website now consists of a solitary message – “notification of administrative leave” – that contains a line on how its now out-of-work employees can come and collect their belongings. Googling USAID and insurance brings up the message “not found”, which has replaced an entire section of the agency’s website on policies that helped raise financing by mitigating risk.

Six weeks into his presidency, Trump came to a US Capitol controlled by his Republican Party to deliver a speech that referenced his freeze on foreign aid as an achievement. Addressing the joint session of the US Congress on March 4 for the first time since he returned to power in January, Trump declared: “The American Dream is unstoppable.”

The truth, however, is the Trump nightmare is unstoppable unless and until the private sector, including insurers, speaks truth to power. Otherwise, they will have no excuse to complain when they find themselves unable to do business – and that includes the business of humanitarian work.

Fact-checking

In this era of Trumpism, there is a new line of work for journalists. What used to be live reporting is now live fact-checking. Like simultaneous translators, their job is to turn what is at best demented hyperbole and at worst brazen lying into something resembling the truth. In an age of “mis and dis” (information), we all miss truth as a dear departed friend. These fact-checkers – who had honed their skills when looking for immigrants eating cats and dogs in Springfield, Ohio – went into overdrive during Trump’s Congress speech, when he claimed, for example, $8m of aid money was being spent on experiments “for making mice transgender”.

There was no mention of actual projects that save and improve the lives of the world’s most vulnerable people. Trump did not mention, for example, Inherent Risks, the London-based firm behind Ukraine Response, a war and accident membership that is fully indemnified with the backing of Lloyd’s and company market insurers, whose mission is to provide emergency medical response and evacuation services to USAID partners in Ukraine.

There was no mention either of broker WTW’s “resilience wrapper” scheme, funded by USAID, to provide parametric solutions to protect development loans from climate shocks. Nor was there a word about companies that had responded to USAID’s call to action at COP28 and committed a combined $3bn in both cash and in-kind resources to advance climate adaptation and resilience. One of them, Jupiter Intelligence, is developing a product that can model how any location on Earth is likely to be affected in the years from now until 2100 by eight climate risks. Nothing was said either about Oko Finance, a start-up providing climate insurance in Africa, which is reportedly considering a sale after the funding it expected to receive from USAID was frozen.

Etc, etc.

Trump was heckled by Democrats, but not a single Republican dared to do anything but applaud Dear Leader. So far, so Animal Farm. “And by the time the sheep had quieted down, the chance to utter any protest had passed, for the pigs had marched back into the farmhouse.”

The US administration’s enthusiasm for vacating international development and humanitarianism will see others fill the vacuum. The irony for the Trump “strategists” is the biggest of these will undoubtedly be China. That point will presumably come up when Pete Marocco, deputy administrator-designate at USAID, meets Democrats and Republicans on the House of Representatives foreign affairs committee today to discuss foreign assistance. That is, after they are done with discussing rodents who would prefer to have been born female.