You are using USCOUNTER in a subshell, that's why the variable is not showing in the main shell.
Instead of cat FILE | while ..., do just a while ... done < $FILE. This way, you avoid the common problem of I set variables in a loop that's in a pipeline. Why do they disappear after the loop terminates? Or, why can't I pipe data to read?:
while read country _; do
if [ "US" = "$country" ]; then
USCOUNTER=$(expr $USCOUNTER + 1)
echo "US counter $USCOUNTER"
fi
done < "$FILE"
Note I also replaced the `` expression with a $().
I also replaced while read line; do country=$(echo "$line" | cut -d' ' -f1) with while read country _. This allows you to say while read var1 var2 ... varN where var1 contains the first word in the line, $var2 and so on, until $varN containing the remaining content.