Defunding USAID: A Timeline of Events?

The Trump Administration’s actions to reassess federal aid policy have had widespread impacts on USAID, its staffers, grantees, and its subcontractors/subawardees. Following President Trump’s Executive Order: Reevaluating and Realigning United States Foreign Aid, a legal battle has ensued, creating chaos around the existence of the agency and the status of it’s employees. 

USAID: Timeline of events (2025)

• January 20 – President Trump signs the Executive Order: Reevaluating and Realigning United States Foreign Aid, which calls for a 90-day pause on almost all foreign aid programs and initiates a 90-day review period to reassess the administration’s foreign aid policy and programs. 
• January 27 – the Office of Management and Budget (OMB) issues Memorandum M-25-13: Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs, which implements an immediate freeze of the federal financial assistance program.
• January 28 – A U.S. District Court Judge in Washington D.C.grants an administrative stay halting the freeze.
• January 29 – The OMB rescinds Memo M-25-13.
• January 31 – A second U.S. District Court Judge issues a temporary restraining order against the funding freeze. 
• February 1 – The USAID website goes offline. 
• February 3 – Secretary of State Marco Rubio is appointed as Acting Administrator for USAID; USAID’s D.C. headquarters is closed to agency personnel. 
• February 4 – The Trump administration notifies USAID to pull non-essential workers out of the field worldwide within 30 days, effective February 7.
• February 7 – A U.S. District Court Judge blocks the order to pull USAID workers off the job within 30 days and orders USAID staffers to be reinstated. 
• February 11 – USAID Inspector General Paul Martin is terminated from his position.
• February 13 – A U.S. District Court Judge issues a temporary restraining order requiring the Trump administration to restore funds for foreign aid programs. 
• February 18 – In court filings, the Trump administration states it is not disbursing funds for thousands of foreign aid contracts and grants despite Judge Ali’s February 13 order to lift the freeze. The administration says that USAID and the State Department have legal authority to halt payments that do not depend on the January 20 executive order. 

The bottom line

Legal proceedings are ongoing and expected to continue, leaving confusion and uncertainty in their wake. Subcontractors and subawardees are particularly vulnerable, with USAID effectively unreachable and no direct recourse to the government.

When determining next steps, it will be critical to seek assistance from legal counsel and accounting advisors knowledgeable in federal grants. 

Navigating stop-orders and other changes can be complex, but you don’t have to do it alone. Aprio’s Government Contracting and Nonprofit teams are here to guide you every step of the way. Whether you need support with claims work, termination settlements, or strategic planning, we’re ready to help. 

Connect with an Aprio team member.  

Related Resources

Prime Contractors: How to Manage Multiple Terminations, Subcontractors, and Settlements

Government Contractors: You Need a Financial Action Plan

Federal Funding Freeze: Steps for Short- and Long-Term Success