Washington DC - A divided US federal appeals court ruled on Wednesday that President Donald Trump's administration can go ahead with billions of dollars in cuts to foreign assistance programs.

The US Court of Appeals for the District of Columbia Circuit, in a 2-1 decision, overturned a ruling by a lower court that the aid payments appropriated by Congress should be restored.

Trump froze billions of dollars in foreign aid spending after taking office in January and began shutting down the US Agency for International Development (USAID).

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USAID has long been the primary US government organization for distributing humanitarian aid around the world, with health and emergency programs in around 120 countries.

District Judge Amir Ali, an appointee of former President Joe Biden, issued a temporary restraining order earlier this year prohibiting the Trump administration from suspending foreign assistance funds approved by Congress for fiscal year 2024.

But the appeals court, in a victory for Trump, reversed the district court ruling, saying grant recipients who brought the case lacked the legal standing to bring the suit.

"The district court erred in granting that relief because the grantees lack a cause of action to press their claims," wrote Judge Karen Henderson, an appointee of former President George H.W. Bush.

Henderson and Judge Gregory Katsas joined the majority opinion while Judge Florence Pan, a Biden appointee, dissented.

Trump, after taking office for the second time, launched a sweeping campaign to downsize or dismantle huge swaths of the US government.