US appeals court lifts injunction on Trump effort to slash foreign aid
The two-to-one ruling on Wednesday overturned a previous injunction that required the State Department to resume the payments, including about $4bn for the US Agency for International Development (USAID) and $6bn for HIV and AIDS programmes.
But the majority opinion from the appeals court did not weigh the merits of whether Trump could nix congressionally approved funds.
Instead, it decided the case based on the idea that the plaintiffs did not meet the legal basis to qualify for a court injunction.
Writing for the majority, Circuit Judge Karen Henderson said the groups in question 'lack a cause of action to press their claims'. They include the AIDS Vaccine Advocacy Coalition and the Journalism Development Network, both recipients of federal aid.
'The grantees have failed to satisfy the requirements for a preliminary injunction in any event,' wrote Henderson, who was appointed by former President George HW Bush.
She was joined in her decision by Gregory Katsas, a Trump appointee.
However, the panel's third judge — Florence Pan, nominated under former President Joe Biden — issued a dissenting opinion that argued Trump should not be allowed to violate the separation of powers by cutting the aid.
'The court's acquiescence in and facilitation of the Executive's unlawful behaviour derails the carefully crafted system of checked and balanced power that serves as the greatest security against tyranny — the accumulation of excessive authority in a single Branch,' Pan wrote in her opinion.
The ruling hands a victory to the Trump administration, which has faced a series of legal challenges over his efforts to radically reshape the federal government.
That includes through dramatic cuts to spending and government agencies like USAID, which was established by an act of Congress.
Almost immediately upon taking office, Trump announced a 90-day pause on all foreign aid.
He has since moved to gut USAID, prompting outcry from two of his predecessors, presidents Barack Obama and George W Bush.
By March, the Trump administration had announced it planned to fold USAID into the State Department, fundamentally dismantling the agency. That same month, Secretary of State Marco Rubio also said he had cancelled 83 percent of USAID's contracts.
Part of Trump's reasoning for these changes was to reduce 'waste' and 'bloat' in the government. He also sought to better align government programming with his 'America First' agenda.
But critics say the executive branch does not have the power to tear down congressionally mandated agencies. They also argue that Congress has the power to designate funds for aid, framing Trump's efforts as a push for extreme presidential power.
Republicans, however, control both houses of Congress, and in July, it passed the Rescission Act of 2025, allowing the government to claw back nearly $9bn in foreign aid and funding for public broadcasting.
US District Judge Amir Ali previously ruled that the Trump administration must pay its agreed-upon funds with humanitarian groups and other contractors that partnered with the government to distribute aid.
Administration officials in February estimated there was $2bn in outstanding aid payments due by the deadline Judge Ali set.
But the appeals court's ruling has set back cases to restore the foreign aid to the contractors.
Attorney General Pam Bondi celebrated the decision on Wednesday, stating that the Justice Department would 'continue to successfully protect core Presidential authorities from judicial overreach'.
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