A federal judge ordered the Trump administration on Thursday to temporarily lift a three-week funding freeze that has shut down U.S. aid and development work worldwide, citing the sweeping damage that the sudden shutdown has done to the nonprofits and other organizations that help carry out U.S. assistance overseas.
The court ruling was the second to deliver a major setback for the Trump administration in what has been its dismantling of the six-decade-old U.S. Agency for International Development, which President Donald Trump and ally Elon Musk accuse of being out of line with Trump's agenda.
Thursday's ruling by the U.S. district court in Washington is the first ruling that targets what aid groups and others say has been a sudden and absolute cutoff of USAID funds for programs abroad.
The funding cutoff has left contractors, farmers and suppliers in the U.S. and around the world without hundreds of millions of dollars in pay for work already done and forced wide-scale layoffs among those enterprises.
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Judge Amir Ali issued the temporary order Thursday in the U.S. in a lawsuit brought by two organizations, the AIDS Vaccine Advocacy Coalition and the Global Health Council, representing health organizations receiving U.S. funds for work abroad.
In his order, Ali noted that the Trump administration argued it had to shut down funding for the thousands of USAID aid programs abroad to conduct a thorough review of each program and whether it should be eliminated.
However, administration officials “have not offered any explanation for why a blanket suspension of all congressionally appropriated foreign aid, which set off a shockwave and upended” contracts with thousands of nonprofit groups, businesses and others “was a rational precursor to reviewing programs,” the judge said.
Lawyers for the administration had failed to show they had a “rational reason for disregarding...the countless small and large businesses that would have to shutter programs or shutter their businesses altogether,” the judge added.
The ruling also bars Secretary of State Marco Rubio and other Trump officials from enforcing stop-work orders that the Trump administration and Musk have sent to the companies and organizations carrying out foreign aid orders.
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The funding order applies to contracts that were in place before Trump issued his Jan. 20 executive order declaring a freeze on foreign assistance.
Ali also rejected the Trump administration's argument that it was buffering the impact of the funding freeze, offering waivers to allow funding to keep flowing to some aid partners.
Ali cited testimony that no such waiver system yet existed and that the online payment system at USAID no longer functioned.
He rejected a request from the health organizations to challenge Trump's executive order itself, limiting his ruling to temporarily blocking Rubio and other administration officials from enforcing it.
Earlier Thursday, a judge in a separate case over the Trump administration's dismantling of USAID and U.S. aid programs abroad said that his order halting the Trump administration’s plans to pull all but a fraction of USAID staffers off the job worldwide will stay in place for at least another week.
U.S. District Judge Carl Nichols ordered the extension after a nearly three-hour hearing Thursday, much of it focused on how employees were affected by abrupt orders by the Trump administration and Musk, who leads President Trump's Department of Government Efficiency, to put thousands of USAID workers on leave and freeze foreign aid funding.
The judge said he plans to issue a written ruling in the coming days on whether the pause will continue.
Nichols closely questioned the government about keeping employees on leave safe in high-risk overseas areas. When a Justice Department attorney could not provide detailed plans, the judge asked him to file court documents after the hearing.
