Which agencies will Trump eliminate?
I put the odds that USAID is eliminated during Trump’s term meaningfully above the market, but still below a coin flip. The most plausible path is a serious attempted dismantling or absorption into another department, while full legal elimination remains constrained by Congress and the courts.
Analysis
USAID is one of the most ideologically vulnerable agencies in a Trump administration because it sits at the intersection of foreign aid, bureaucracy, and presidential control. Trump has repeatedly shown willingness to slash, reorganize, or hollow out institutions he views as misaligned with his agenda, and USAID is an especially natural target for that style of governance. If the administration is aggressive and willing to spend political capital, there is a credible path to eliminating the agency in practice by folding functions into the State Department, cutting budgets to the bone, or forcing a structural reorganization that leaves the standalone entity defunct.
Against that, true elimination is harder than attacking an agency rhetorically. USAID is embedded in statute, foreign policy workflows, appropriations, and contractor ecosystems, which means a durable wipeout likely requires congressional action or at least a very favorable legal environment. Even a determined White House can face injunctions, administrative law hurdles, and pushback from appropriators, diplomats, humanitarian groups, and members of both parties who see value in maintaining an independent aid apparatus. That makes “eliminated” a much higher bar than “severely weakened,” and markets often blur that distinction.
Relative to the current price, 23% looks a bit low if the market is pricing a realistic chance that Trump can meaningfully move against USAID over a four-year term. The market may be underweighting how much a second Trump term could prioritize institutional restructuring and how little political appetite there may be to defend foreign aid agencies in Congress. Still, I would not push the probability close to a majority because the legal and legislative friction is substantial, and a lot of what looks like elimination could end up being partial consolidation instead of a clean disappearance.
Arguments
For
- USAID is politically easy to attack and relatively low on the domestic priority list compared with entitlement or defense programs.
- A determined administration can try to disable the agency through reorganization, budget cuts, and personnel reductions.
Against
- Statutory and appropriations constraints make true elimination much harder than executive rhetoric suggests.
- Bipartisan foreign-policy interests and institutional inertia could preserve the agency even under heavy pressure.
Key drivers
- Trump has a strong incentive to target USAID as a symbol of foreign-aid bureaucracy.
- Full elimination likely needs Congress or a legally durable reorganization, which is a major constraint.
Risk factors
- Courts or Congress could block a formal shutdown even if the administration moves aggressively.
- The market may count a merger or hollowing-out as elimination, which would make the outcome definition-sensitive.
Scenarios
Best case
Trump uses executive and budgetary power to force a merger or liquidation of USAID functions into the State Department, and the agency effectively ceases to exist as an independent entity.
Most likely
USAID is substantially weakened and possibly partially reorganized, but a complete and unambiguous elimination does not happen.
Worst case
USAID survives the term with only limited restructuring, because Congress, courts, and the foreign-policy establishment block any meaningful elimination.
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