Such programs are a cost-effective and proven form of partnership-building. Their loss will undermine U.S. influence in a crucial region of the Indo-Pacific.
The Strategic Costs of U.S. Exchange Program Cuts in Southeast Asia
Participants in the U.S.-funded Young Southeast Asian Leaders Initiative take part in a conference in Ho Chi Minh City, Vietnam, Sept. 19, 2025.
In August, the Trump administration cut $100 million of Fiscal Year 2025 funds for over 20 U.S. State Department educational and cultural exchange programs. The list included the Young Southeast Asian Leaders Initiative (YSEALI), which has brought thousands of Southeast Asian youths to the United States since 2013. Many of the funds, already congressionally approved, had been frozen since February.
According to Secretary of State Marco Rubio, every aspect of U.S. decision-making must be guided by the answer to one of three questions: “Does it make America safer? Does it make America stronger? Or does it make America more prosperous?”
YSEALI fulfills all three. Amid cuts to the U.S. Agency for International Development (USAID), high tariffs, and U.S. support for Israel, Southeast Asian youths have been growing distrustful of the United States. Programs like YSEALI are a cost-effective way to bolster U.S. credibility in the region. YSEALI alumni have gone on to hold prominent leadership positions in their countries, shaping foreign policy relevant to the United States. Cutting YSEALI ultimately risks weakening U.S. relationships in a region central to global commerce, supply chains, and digital governance, and where the contest for influence with China is only intensifying.
What is YSEALI?
Launched in 2013 by then-President Barack Obama, YSEALI seeks to “strengthen people-to-people ties between the United States and young leaders” across Southeast Asia. YSEALI fellows are selected through a competitive process based on demonstrated leadership in their home communities. They then spend five weeks in the United States engaging in work placements, academic residency, and community service activities. Fellows specialize in themes like civic engagement, governance, environmental issues, and social entrepreneurship.
This analysis centers on YSEALI, given its specific focus on Southeast Asia. However, YSEALI is not the only State Department exchange program relevant to the region and threatened by funding cuts. The Kennedy-Lugar Youth Exchange and Study Program, for instance, funds U.S. high school students to spend a year in one of 12 countries, three of which are in Southeast Asia.
Exchange programs have long enjoyed bipartisan support in the United States. Following the recent funding cuts, Senators Cory Booker (D-NJ) and Susan Collins (R-ME) publicly urged the Office of Management and Budget to reverse its decision. President Donald Trump himself has positively referenced YSEALI in multiple joint statements with Southeast Asian leaders, including with Singapore’s then-Prime Minister Lee Hsien Loong and Philippine President Rodrigo Duterte in 2017. In 2018, Trump signed into law the Asia Reassurance Initiative Act, which authorized $25 million annually from FY2019 through FY2023 for YSEALI and similar programs.
Trump’s second administration has demonstrated a deep skepticism of soft power. An early draft of the President’s FY26 discretionary budget recommends decreasing funds earmarked for educational and cultural exchanges by $691 million, or about 93 percent, citing “inefficient, wasteful programming at the expense of U.S. taxpayers.” Yet even by the yardsticks of a safer, stronger, and more prosperous United States, programs like YSEALI have a pivotal role to play.
How YSEALI benefits the United States
Exchange programs are “one of the best returns on investment in the federal budget,” according to the D.C.-based non-profit Alliance for International Exchange. At $741 million in FY24, funding for international exchange programs constitutes a mere 0.0006 percent of the federal budget, of which 90 percent is spent on Americans or within the United States.
Exchange programs can also offer a more nuanced view of the United States to international participants. At a time when trust in the United States is waning among young Southeast Asians, direct people-to-people engagement can effectively counter quick headlines and social media echo chambers to bridge cultural differences. Washington is far from a perfect reflection of the American public. Through attending courses at U.S. universities, speaking with politicians from both sides of the aisle, and engaging with local communities, YSEALI fellows gain exposure to the country’s cultural and ideological diversity. Conversely, these interactions can help Americans gain deeper, first-hand insights into a region where U.S. expertise and attention are on the decline.
Opportunities for cross-border engagement are increasingly critical against a backdrop of falling international student enrollment in U.S. schools. In August 2025, student arrivals in the United States from Malaysia, the Philippines, and Vietnam saw year-on-year declines of 24, 21, and 17 percent, respectively.
Crucially, YSEALI is specifically designed for those with minimal prior study or travel experience in the United States, underscoring the necessity of U.S. funding in opening doors for Southeast Asian youth. In an interview with the author, an academic fellow from YSEALI’s 2024 cohort expressed that “YSEALI was one of the best things that ever happened to me. And made me realize that the [United States] can actually put its funding to good and change lives.”
Finally, beyond strengthening the United States’ global credibility, YSEALI can influence future U.S.-Southeast Asia foreign policy. Program alumni have gone on to hold positions of power in their respective countries, including former Malaysian Youth and Sports Minister Syed Saddiq and former Singapore parliamentarian Carrie Tan.
Broader Implications
Many point to the U.S.-China rivalry as a key reason to invest in Southeast Asia. U.S. access to military bases in the region will require strong, sustained partnerships. However, a growing number of regional analyses conclude that the United States has fallen behind China in economic and diplomatic influence. Southeast Asian economies are still reeling from the abolishment of USAID, which funded disaster recovery and de-mining programs, for example, as well as some of Trump’s harshest reciprocal tariffs.
But Southeast Asia is far more than just a pawn in the U.S.-China strategic competition. Beyond great power competition, the region is critical to broader U.S. interests such as energy and minerals supply chains, shipping lanes, high-end manufacturing, and digital governance.
While the United States remains the leading regional security partner, Indonesia, Malaysia, and even the Philippines are turning to non-traditional partners like Turkiye for new arms deals. In the longer term, then, Washington’s diminishing soft power in the region cannot be offset by military or trade deals alone. Undermining longstanding partnerships like YSEALI will only perpetuate the notion that the United States is an unreliable partner. Moreover, relationship-building need not contradict Trump’s “America First” agenda. The relationships formed in YSEALI better position leaders in both Southeast Asia and the United States to tackle shared issues like cyber scams, which cost Americans at least $10 billion in 2024, and terrorism.
For over a decade, YSEALI has positioned the United States as a partner invested not just in regional security or trade, but in the aspirations of young people across Southeast Asia. It has proven to be a cost-effective, steady form of partnership-building. A safer, stronger, and more prosperous United States will emerge not from isolation, but from engagement – especially with those who will shape the future of their nations.
