Washington: A divided US Supreme Court on Wednesday rejected President Donald Trump’s attempt to freeze $2 billion in foreign aid payments, delivering a legal setback to his administration.

In a 5-4 decision, the court upheld a lower court order requiring that payments be made for aid contracts that have already been completed. The ruling marks the Supreme Court’s first major decision on a legal challenge to the Trump administration.

Chief Justice John Roberts and Justice Amy Coney Barrett, a Trump appointee, sided with the three liberal justices to form the majority. The ruling stated that the federal judge who ordered the resumption of payments for contracts with the US Agency for International Development (USAID) and the State Department should "clarify what obligations the Government must fulfill."

Dissent criticises court's decision

Justice Samuel Alito authored a dissent, joined by three other conservative justices, questioning the lower court’s authority.

"Does a single district-court judge who likely lacks jurisdiction have the unchecked power to compel the Government of the United States to pay out (and probably lose forever) 2 billion taxpayer dollars?" Alito wrote.

"The answer to that question should be an emphatic 'No,' but a majority of this Court apparently thinks otherwise. I am stunned," he added.

Trump’s push to curtail USAID

The ruling comes amid Trump's broader efforts to scale down the US government, a campaign spearheaded by his top donor, billionaire Elon Musk. The administration has focused particularly on USAID, which oversees US humanitarian aid and emergency programs in around 120 countries.

Trump has previously accused USAID of being "run by radical lunatics," while Musk has described it as a "criminal organization" that should be dismantled.

District Judge Amir Ali, appointed by former president Joe Biden, had last month issued a temporary restraining order preventing the Trump administration from "suspending, pausing, or otherwise preventing" foreign assistance funds.

With AFP inputs