The Trump administration faces a choice in the developing world that it has yet to fully confront. It can either continue treating Africa, Latin America, and the Caribbean as an afterthought punctuated by warnings about Chinese debt traps, or it can build an actual strategy for competing with Beijing on the terrain that matters most to the countries in question: capital, technology, and market access. So far, the instinct has leaned toward the former, and the closure of USAID, whatever the political noise it generated, was in fact a step toward clearing space for the latter.
Read more The Failure of the Tiger Mom
Decades of evidence have demonstrated that foreign aid does not produce growth.1 Aid can cushion a famine, fund a vaccine campaign, or rebuild a road after a hurricane, but it has never been the mechanism by which a poor country becomes a rich one. Over time, USAID deviated from even that modest development mandate, becoming less an instrument of economic and humanitarian development and more of a conduit for exporting left-leaning social and political preoccupations to societies that had not asked for them and often actively resisted them. Shuttering the agency in that form was not an abdication of American interest abroad, but rather an overdue correction.
At the same time, however, Washington cannot simply write off the developing world, and American policymakers are already realizing that their enthusiasm for ideological campaigns has limits when it comes to China’s growing economic clout in Africa, Latin America, and the Caribbean. According to one estimate, Chinese investments in Africa alone totaled $33.5 billion in the first half of 2026, the strongest half-year on record for the continent under the Belt and Road Initiative, and Chinese capital is pouring into the region with a purpose, as Beijing seeks to obtain resources, access new markets, and build political alliances. Essentially, China is positioning itself to benefit from Africa’s growth rather than merely profiting from the continent’s struggles as a bystander.
Herein lies the structural problem that no amount of rhetoric can paper over. China can direct its state-owned enterprises and lean on its policy banks to deploy capital at a scale and speed that no American administration can replicate. China is an authoritarian state with direct leverage over commercial actors that answer to the party before they answer to a balance sheet. Washington has no equivalent lever. It cannot dictate to Chevron or Citibank where to invest, and it should not want to acquire that power even if it could, which leaves America issuing warnings about Chinese influence while offering developing countries little that is tangible in its place. Telling a finance minister in Lusaka or Accra to be wary of Beijing carries limited weight when Beijing is the one building the port.
The American private sector, for its part, has never displayed much enthusiasm for the developing world on its own initiative, and risk perceptions, thin capital markets, and the absence of familiar legal infrastructure have kept American capital concentrated in markets it already understands.2 That reluctance is real, but it is not immovable, and with the right architecture of incentives, American firms can be drawn into exactly the kind of competition with China that policymakers claim to want, provided the government stops assuming that private capital will simply follow flag waving.
Understanding why China is winning requires setting aside the assumption that this is primarily an ideological contest. Obviously, it is not, at least not from Beijing’s side. China is not exporting its ideals or a governance model to its partners so much as buying influence through investment while remaining largely indifferent to the domestic politics of the countries it invests in. Washington, by contrast, keeps reaching for abstractions such as democracy promotion, humanitarian leadership, and the rules-based order, and while these ideals are not without value, as a competitive strategy against a rival playing an entirely different game, they consistently lose. American foreign policy in the developing world would be better served by treating leverage, sustained through concrete investment and technology partnerships, as the actual currency of influence, with the abstractions kept in reserve rather than deployed as the opening bid.
China’s newest move illustrates the model well. In July 2026, Beijing launched the World Artificial Intelligence Cooperation Organization, an intergovernmental body headquartered in Shanghai that has already drawn 29 member states, most of them from the developing world.3 It is framed as a governance initiative meant to make AI development safe, fair, and broadly shared, but its practical effect will be to route technology transfer partnerships toward its members, precisely the kind of tangible benefit that governments in the developing world find attractive and that no amount of American lecturing about values can substitute for.
America retains a genuine advantage here, if it chooses to use it. and commercial deployment, and it could stand up a rival body that gives developing countries an actual seat at the table rather than a supporting role.4 The distinguishing feature of such an organization should be its membership structure: not states alone, as with China’s model, but states alongside private entrepreneurs and research institutions. This design choice would be a genuine American advantage, since it would let entrepreneurs in developing economies help shape the resulting AI policy while gaining direct access to the expertise of American researchers and founders. Over time, an organization built this way would raise the technical and institutional capacity of its developing country members and make them more attractive destinations for American investors on commercial terms rather than concessional ones.
Furthermore, a parallel reckoning is needed at the Development Finance Corporation, which should either be made relevant to this competition or wound down, because in its current form it is not fit for purpose. Like much of the federal development apparatus, it has absorbed the priorities of identity politics, channeling billions toward initiatives while the actual engines of national economic growth go underfunded.5 High-growth, innovative firms are the engine of growth, not small and medium enterprises, and they are what drive development outcomes at scale, since the reason developed economies are developed is precisely that they have built larger, more innovative companies capable of competing globally, not that they have accumulated large numbers of small ones.6
Read more Morning Greatness: Trump Names Staff Secretary Will Scharf as New White House Counsel
The DFC should launch a dedicated program built around internationalization, product development, and organizational leadership, and eligibility should be restricted to the larger companies already operating in developing economies rather than the small businesses that have absorbed the bulk of the agency’s attention and that were never going to scale into serious global competitors. For Africa specifically, the DFC should stand up a companion accelerator program for the minerals sector, again limited to the larger firms with the balance sheets to absorb and deploy serious capital, so that American investment aligns with the resource base China is already racing to secure. To make that investment competitive, the tax treatment extended to rare-earth investment in African markets should match what an American company would receive for equivalent activity in Texas, since anything less simply cedes the sector to the state that’s willing to promote the aggressive expansion of local companies, and that state at present is China.
America does not need to abandon its values to pursue any of this. Free-market capitalism and good governance remain worth defending and worth building into the terms of any partnership Washington offers. But outcompeting China requires first understanding the game China is actually playing and what developing countries are actually listening for, and neither of those is a debate about political philosophy. China is not fighting an ideological war but is instead buying influence methodically and at scale, and the sooner American policymakers internalize that distinction, the sooner they can compete on the same terrain. An America First foreign policy worthy of the name would mean strategy: capital deployed with intent, technology shared on terms that build loyalty, and incentives structured to win. It would mean rather less recycling of stale sentiment about being the leader of the free world and rather more building the kind of leverage that actually persuades a finance minister to pick Washington over Beijing.
1 William Easterly, The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good (New York: Penguin Books, 2007).
2 Kapstein, Ethan B. “Private Enterprise, International Development, and the Cold War.” Journal of Cold War Studies 22, no. 4 (2020): 113–145.
3 Dana Omirgazy, “Why Kazakhstan’s WAICO Membership Matters for Its AI Ambitions,” The Astana Times, July 27, 2026.
4 Jeffrey Ding, Deciphering China’s AI Dream: The Context, Components, Capabilities, and Consequences of China’s Strategy to Lead the World in AI (Oxford: Centre for the Governance of AI, Future of Humanity Institute, University of Oxford, March 2018).
5 U.S. International Development Finance Corporation, DFC Public Information Summary (Washington, DC: U.S. International Development Finance Corporation, 2026) Active DFC Projects
6 Daniel Isenberg and Ross Brown, “For a Booming Economy, Bet on High-Growth Firms, Not Small Businesses,” Harvard Business Review, February 3, 2014.
Read more Jason Arday, Barack Obama, and the Making of Myths
