UN Financial Crisis: U.S. Suspension of Dues and the Survival Test of the Multilateral System
01/02/2026
On January 28, 2026, UN Secretary-General Guterres sent an unprecedented urgent letter to the ambassadors of 193 member states. In the letter, he clearly pointed out that due to major member states refusing to pay their mandatory contributions, the United Nations is facing imminent financial collapse, with regular budget funds potentially running out as early as July this year. This is not the first time the UN has faced liquidity pressure, but Guterres emphasized that the current situation is fundamentally different—the core of the crisis directly targets the United States, the UN's largest financial pillar. Since the beginning of President Trump's second term, the United States has not only significantly reduced voluntary donations but also unprecedentedly stopped paying its assessed contributions for the regular budget and peacekeeping operations, with cumulative arrears exceeding 1.4 billion dollars. At the same time, in January 2026, the United States announced its withdrawal from 31 UN agencies, including the WHO, and high-profile launched the Peace Commission, seen as a parallel to the United Nations. This financial crisis has gone far beyond a budget imbalance; it marks the most severe legitimacy challenge to the multilateral system centered around the United Nations since its establishment after World War II.
The specific composition of the financial crisis and the "Kafkaesque" dilemma.
According to Guterres' letter and internal United Nations documents, the severity of this crisis is reflected in three intertwined levels. The first level is the massive arrears in statutory contributions. By the end of 2025, the total amount of unpaid contributions to the United Nations reached a record high of $1.57 billion, with the vast majority coming from the United States. The United States is responsible for 22% of the regular budget based on the UN scale of assessments, but in the 2025 fiscal year, the White House did not pay any portion of its $826 million dues. The contribution bill for 2026 amounts to $767 million, which remains entirely unpaid as well. China, as the second-largest contributor, has paid its 20% share on time, highlighting the unilateral nature of the crisis.
The second level is the double blow caused by the outdated rule of returning unused funds. The United Nations Financial Regulations stipulate that if budget items approved for a fiscal cycle are not executed, the remaining funds must be returned to member states that have paid their assessed contributions. The problem is that these funds to be returned often never actually enter the UN’s accounts in reality due to arrears from other member states. In his letter, Guterres referred to this as a Kafkaesque cycle—the organization is required to return money that does not exist. In January 2026 alone, the UN had to return $227 million on paper, funds that were never actually collected. This mechanism, which functioned as a technical adjustment when funds were abundant, has now become a wound that accelerates bleeding.
The third level is the limit of internal austerity. To address the crisis, the United Nations launched a reform task called UN80 starting in 2024, with the goal of cutting costs and improving efficiency. The regular budget for 2026 has been reduced by 7%, set at 3.45 billion US dollars (some documents show 3.238 billion US dollars). Approximately 2,400 positions have been eliminated, and the New York headquarters even stopped purchasing paper bathroom towels, saving about 100,000 US dollars annually. Elevators in the Palais des Nations in Geneva are often shut down, and heating is turned down. However, these administrative cost-saving measures are merely a drop in the bucket compared to the multi-billion-dollar shortfall. Guterres frankly stated that the structural deficit is too large to be covered solely by internal reforms.
U.S. Strategic Shift: From "Largest Contributor" to "System Challenger"
The immediate trigger for this crisis is a historic shift in the United States' policy toward the United Nations, underpinned by a more clearly articulated diplomatic philosophy during the second term of the Trump administration. To analyze this shift, it is necessary to examine it from three dimensions: actions, rhetoric, and institutional alternatives.
In terms of actions, the U.S. withdrawal and suspension of payments are systematic. The withdrawal in January 2026 involves 66 international organizations, including 31 within the United Nations system, such as UN Women and the Human Rights Council. Financially, the U.S. has not only halted its mandatory contributions but also significantly reduced voluntary donations. A symbolic comparison is that in 2022, the U.S. provided approximately 170 billion dollars in humanitarian funding through UN channels, while in December 2025, although the U.S. pledged 2 billion dollars in humanitarian aid, it attached a warning that the UN must adapt or perish. For peacekeeping operations, the U.S. has paid only 30% of the expected funds. This selective funding model aims to place the flow of funds entirely under unilateral U.S. control, undermining the UN's overall coordination and allocation functions.
In terms of rhetoric, Trump and his team constructed an alternative narrative. Trump publicly stated on multiple occasions that the United Nations has great potential but has failed to fulfill it, accusing it of inefficiency and failing to support U.S.-led peace initiatives. When announcing the launch of the Peace Committee at Davos, he bluntly remarked, "I have never even spoken to the United Nations." This discourse portrays the United Nations as a failed, outdated bureaucracy, laying the groundwork for legitimacy in establishing an alternative institution.
The most strategically significant aspect is the construction of an institutional alternative. The Peace Committee was initially promoted as focusing on the reconstruction of Gaza, but its scope rapidly expanded. Trump publicly stated that the committee could play a role in other global conflicts requiring mediation. When asked by a Fox News reporter whether this committee might replace the United Nations, his response was, "Well, it's possible." Although the White House later clarified that its work would be coordinated with the UN, the potential impact of a parallel institution led by the United States, well-funded, and unconstrained by UN procedural rules, is self-evident. This essentially creates a Security Council without veto power and a General Assembly without majority voting, with its core logic being the replacement of multilateral consensus with U.S. preferences.
The Real Impact of the Crisis on Global Governance and Humanitarian Action.
The financial crisis has spread from boardrooms in New York to the world's most vulnerable communities, turning abstract numbers into a matter of life and death through the disruption of specific programs. In Afghanistan, a country with one of the highest maternal mortality rates globally, the United Nations Population Fund has been forced to close multiple maternal and child health clinics due to funding shortages. This means tens of thousands of women will lose access to prenatal check-ups, safe delivery services, and newborn care. In Sudan, refugees fleeing conflict are finding that the food rations distributed by the World Food Programme are dwindling, making hunger a more immediate threat than the fighting itself. The Office of the United Nations High Commissioner for Human Rights warns that due to a lack of funding to deploy investigators, severe human rights violations will go unrecorded and undocumented. In the past, such evidence has been crucial for prosecuting war crimes and crimes against humanity.
Peacekeeping operations face direct risks. The troop-contributing countries for peacekeeping forces are usually developing nations, and their deployment expenses rely on United Nations reimbursements. Funding shortages may lead to delays or cuts in reimbursements, directly affecting troop rotations, equipment maintenance, and logistical support. In volatile regions such as the Democratic Republic of the Congo, Mali, and South Sudan, the reduction of peacekeeping forces can quickly create a security vacuum, triggering a new cycle of violence. Humanitarian coordination mechanisms are also weakening, with overarching tools like the UN Central Emergency Response Fund stretched thin, making it difficult to quickly mobilize resources in response to sudden disasters.
The deeper impact lies in the credibility and rules of global governance. The United Nations is not only a project implementation agency but also a guardian of international law, a symbol of sovereign equality, and a negotiation platform for global public issues. Its financial collapse would send a dangerous signal: a rules-based order can be arbitrarily abandoned by the very architects of those rules. This could lead middle powers and smaller nations to further lose confidence in the multilateral system, turning instead to regional alliances or bilateral arrangements, thereby exacerbating the fragmentation of the international community. Major contributing countries such as China, Germany, and Japan face a dilemma: should they increase their contributions to fill the gap, thereby indirectly rewarding defaulting behavior, or should they stand by and watch the system's functions become paralyzed?
Reform Deadlock and the Future of Multilateralism
Guterres presented an either-or choice in the letter: either all member states pay their dues in full and on time, or the financial rules are thoroughly reformed. However, both paths are fraught with difficulties. Demanding that the United States resume its payments holds slim hope in political reality, as the Trump administration has deeply tied America First with anti-globalism, and funding for the United Nations has been portrayed domestically as wasteful. Meanwhile, reforming the financial rules, particularly abolishing the clause on returning unused funds or revising the scale of assessments, requires a two-thirds majority vote in the United Nations General Assembly—a process that is lengthy and filled with contention.
Some compromise solutions privately discussed by diplomats, such as allowing the United Nations to borrow from the working capital fund under specific circumstances or establishing a voluntary supplementary financing pool, can only alleviate symptoms rather than eradicate the root cause. The essence of the crisis lies in the lack of political will, not in flaws of technical design. Traditional supporters of multilateralism, such as EU countries, Japan, and Canada, continue to contribute, but their share is insufficient to sustain the entire system. The role of emerging powers like China has drawn significant attention. Whether and how they balance maintaining existing rules with promoting systemic reforms will influence the evolution of the future power structure.
This crisis coincides with the end of Secretary-General Guterres's term at the end of 2026, which leaves any major reform initiatives lacking stable leadership to advance them. The next Secretary-General will begin work in an institution where finances may be depleted and authority is being questioned.
The newly posted budget warning signs in the corridors of the United Nations headquarters, much like the closed elevators in Geneva, are emblematic of the contradictions of our time: global challenges—from climate change and pandemics to cross-border conflicts—demand multilateral cooperation more than ever, yet the very institutions underpinning such cooperation are teetering due to the abandonment by their founding members. Guterres’ warning letter serves as an alarm bell, sounding not only a countdown to the UN’s potential bankruptcy but also raising a fundamental question about the international community’s capacity to collectively address these challenges. With the July deadline approaching, the answer will soon be revealed.
Reference materials
https://www.bbc.co.uk/news/articles/cr579mdv4m7o
https://www.nytimes.com/2026/01/30/world/americas/un-finances-collapse-debts.html
https://yle.fi/a/7-10092418?origin=rss
https://www.rbc.ua/rus/news/gensek-oon-zayaviv-rizik-finansovogo-kolapsu-1769821467.html
https://www.timesofisrael.com/guterres-warns-un-faces-imminent-financial-collapse/