A federal judge has delivered a blow to President Trump’s USAID funding freeze with an order that demands he reinstate funds for hundreds of foreign aid contracts.

Judge Amir Ali issued the order on Thursday in response to a lawsuit brought about by companies receiving the funding for programs abroad.

Ali, a Washington DC judge appointed by former president Joe Biden, accused the Trump administration of an ‘arbitrary and capricious’ act in halting the funding.

He said the decision to suspend funding for 90 days while conducting a thorough review of each contract and its validity has not been justified or rationalized.

‘At least to date, Defendants have not offered any explanation for why a blanket suspension of all congressionally appropriated foreign aid,’ he said.

Instead, he said the decision has ‘set off a shockwave and upended… thousands of agreements with businesses, nonprofits, and organizations around the country.

‘Absent temporary injunctive relief, therefore, the scale of the enormous harm that has already occurred will almost certainly increase.’

The ruling marks the first to temporarily roll back a Trump administration funding freeze on foreign assistance. 

A federal judge has delivered a blow to President Trump’s USAID funding freeze with an order that demands he reinstate funds for hundreds of foreign aid contracts

The freeze had forced USAID and State Department contractors around the world to stop providing humanitarian aid and other assistance and lay off staff, paralyzing much of the world’s aid delivery networks

Funds have been ordered to begin to flow once again – but this applies to existing contracts before Trump issued his January 20 executive order

The January 20 freeze had forced USAID and State Department contractors around the world to stop providing humanitarian aid and other assistance to those in need.

Additionally, staff lay offs and uncertainty has paralyzed much of the world’s aid delivery networks. 

Now, funds have been ordered to begin to flow once again – but this applies to existing contracts before Trump issued his January 20 executive order – and it’s only a temporary reprieve.

In the ruling, Ali laid out how complainants addressed ‘the existential consequence to their missions, which may endanger the health and safety of children and other vulnerable populations.

He added: ‘At the Court’s hearing, Defendants did not dispute the likelihood of those consequences.’

Secretary of State Marco Rubio and Office of Management and Budget Director Russell Vought have also been barred from continuing any stop-work orders which came into effect after the inauguration while the litigation plays out in the courts.

The decision halts one of Trump’s central policies at a time when Elon Musk is attempting to steamroll through his purge of government bodies.

USAID had been the hardest hit by Musk’s DOGE. 

Trump, along with his billionaire ‘First Buddy’ Elon Musk, has unraveled much of the aid agency and faced legal hurdles along the way 

Trump repeatedly said much of USAID’s spending does not align with his agenda and vision for America. 

The ruling comes just hours after a judge in a separate case over the dismantling of USAID 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. 

Trump, along with his billionaire ‘First Buddy’ Elon Musk, has unraveled much of the aid agency and faced legal hurdles along the way.

The General Services Administration stripped USAID of the lease in Washington it had held for decades as part of the purge.

Staff were locked out of their office and sent home amid warnings the majority of the workforce would be let go. 

And on Tuesday, the inspector general of USAID was sensationally dumped from his role after he issued a sharp warning about the state of affairs within the organization.

Inspector General Paul Martin was fired via an email which said his role was  ‘terminated, effective immediately.’

One day earlier, Martin had released a report warning that President Trump’s dismantling of the organization, with the help of Elon Musk-led DOGE, had made it all but impossible to monitor $8.2billion in unspent humanitarian funds. 

Martin had released a report warning that President Trump’s dismantling of the organisation, with the help of Elon Musk-led DOGE, had made it all but impossible to monitor $8.2 billion in unspent humanitarian funds

Musk’s cost-cutting Department of Government Efficiency has set to work rapidly dismantling government bodies, initially targeting DEI structures

Inspectors general are typically independently funded watchdogs attached to government agencies and tasked with rooting out waste, fraud and abuse. 

The Trump administration earlier purged more than a dozen inspectors general, but Martin had been spared even as his department came under scrutiny for wasteful spending.

Martin’s office issued a flash report warning that the Trump administration’s freeze on all foreign assistance and moves to cut USAID staff had left oversight of the humanitarian aid ‘largely nonoperational.’

That includes the agency’s ability to ensure none of the funding falls into the hands of violent extremist groups or goes astray in conflict zones, the watchdog said.