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The USAID withdrawal in January 2025 created a sudden funding vacuum in the health sectors of many developing countries. Scientists have estimated potentially significant morbidity and mortality due to the withdrawal, so understanding its impacts on the ground is important for creating policies and filling gaps in both funding and service delivery. In Malawi, ~60% of the health sector is donor-funded, with USAID being the (former) largest donor in the country. This study used in-depth interviews and ethnographic observation to investigate the understandings and experiences of health sector officials in the early wake of the USAID retrenchment. While some officials considered the withdrawal potentially devastating for the health sector, most felt confident in the ability of the government and remaining donors to cover the bulk of the shortfall, minimizing service disruption and maintaining a robust health sector response in most areas. These findings are significant because most mass media coverage of the pullout does not highlight the resilience of developing country health systems to manage such an exogenous shock.