United States (U.S.) foreign assistance is sometimes disparaged as mere charity; nonetheless, its effects convey a contrasting narrative. Strategic investments in development save lives and provide future economic prospects for the U.S.. The trajectory from Seoul to Gaborone illustrates that assistance may convert a recipient aid country into a strong trade partner. Timothy Geithner, the former U.S. Treasury Secretary, argued that reducing foreign assistance would adversely affect the U.S. economy and diminish its competitiveness relative to China. U.S. foreign aid and trade together demonstrate how combating global poverty fosters domestic prosperity.

South Korea: A Model of US Foreign Aid and Trade

In the post-Korean War years, South Korea depended significantly on U.S. foreign assistance to maintain its economy and reconstruct its institutions. From 1946 to 1976, the U.S. gave $12.6 billion in economic assistance, including food aid, grants and infrastructure initiatives, making it one of the greatest per capita beneficiaries during that period.

As South Korea’s acting president Han Duck-soo noted, “After the devastation of the Korean War, the U.S. gave us aid, technology transfer, investments and security assurances,” which he credited with helping make South Korea “a very comfortable investment environment for foreigners.”

The results are clear today. In 2024, commerce between the U.S. and South Korea in goods and services amounted to $239.6 billion, with goods trade constituting $197.1 billion.

The U.S.–Korea Free Trade Agreement (KORUS FTA), enacted in 2012, abolished 95% of tariffs and enhanced U.S. exports by around $11 billion. This change demonstrates how U.S. foreign assistance and commerce foster reciprocal prosperity.

Botswana: How US Foreign Aid and Trade Built Prosperity

Upon attaining independence in 1966, Botswana was among the most impoverished countries globally. The U.S. emerged as a crucial development ally, allocating resources to education, health and governance via USAID and Peace Corps programs.

In the health sector, U.S. aid has been pivotal: via the President’s Emergency Plan for AIDS Relief (PEPFAR), the U.S. has allocated approximately $1 billion in health assistance to the Government of Botswana since the program’s inception, highlighting a sustained and transformative commitment to HIV/AIDS prevention, treatment and care.

Over time, assistance established the groundwork for economic collaboration. In 2024, commerce in products and services between the U.S. and Botswana reached $733.4 million, with U.S. exports increasing by almost 52% within one year.

Botswana also benefits from the African Growth and Opportunity Act (AGOA), which provides duty-free access for more than 6,700 products. These results demonstrate how U.S. foreign aid and trade go hand in hand in creating stable partnerships.

US Foreign Aid and Trade as Economic Diplomacy

Foreign assistance transcends mere humanitarian gestures. It serves as an instrument of economic diplomacy. Initiatives such as AGOA and the U.S. International Development Finance Corporation integrate trade and investment objectives into assistance endeavors. This connection fosters an environment conducive to commercial prosperity while tackling global poverty.

In July 2025, the U.S. entered into a new trade agreement with South Korea, ensuring $350 billion in U.S.-managed investments, $100 billion in energy acquisitions and preferential access for U.S. products such as semiconductors and medicines. Such agreements illustrate how U.S. foreign aid and trade evolve into lasting economic partnerships.

US Foreign Aid and Trade as Investment, Not Charity

U.S. foreign assistance is not a unilateral exchange. It is an investment that cultivates future markets, fortifies relationships and alleviates global poverty. South Korea and Botswana exemplify the transition of nations from being an aid recipient to a trade partner. By seeing assistance as an instrument of diplomacy and economic collaboration, the U.S. demonstrates that U.S. foreign aid and trade are mutually reinforcing policies. Combating poverty internationally eventually fosters collective wealth domestically.

– Ray Bechara

Ray is based in Glasgow, Scotland and focuses on Politics for The Borgen Project.

Photo: Flickr