USAID Contractors Sue Trump Over Aid Freeze

A group of organizations and companies that contract with USAID has filed a lawsuit against the Trump administration, accusing it of unlawfully dismantling the U.S. foreign aid agency and cutting off allocated funding.

The American Bar Association, Chemonics, and other development firms sued President Donald Trump, the State Department, and the Office of Management and Budget on Tuesday, arguing that the administration lacks the legal authority to shut down a federal agency created by Congress.

The lawsuit, filed in federal court in Washington, seeks to reverse the funding cuts imposed after Trump’s executive order on January 20, which paused all U.S. foreign aid under the “America First” policy.

According to the plaintiffs, the aid freeze has already impacted millions worldwide, halting contracts worth hundreds of millions of dollars, including a $240 million medical supply delivery that, if not completed, could result in 566,000 deaths, according to court filings.

Contractors say they have been forced to lay off staff and shut down projects, while employees stationed abroad face legal risks and potential stranding due to the funding cuts.

The White House has not commented on the lawsuit but has argued in court that the president holds broad authority over foreign policy and aid distribution.

This is the third lawsuit against the administration over the USAID shutdown, following legal challenges by government employee unions and nonprofit groups. A judge recently ruled that 2,700 USAID employees placed on leave could return to work, but funding for aid programs remains frozen.

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