The Trump administration’s pausing of US aid is a big headwind for many conflict-ridden economies (including Syria and Ukraine) as well as parts of Sub-Saharan Africa, but is unlikely to move the macro needle for most EMs. The potentially bigger implications are longer term and geopolitical. If it proves a pre-cursor to funding cuts by the US for multilateral agencies, it would be far more problematic for many EMs. It could also leave the door open for China to step in as a bigger source of funding in an attempt to expand its influence overseas.
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