The Trump administration has effectively abandoned its $1.8 billion ‘anti-weaponisation’ compensation fund, bowing to an intense Republican backlash and a federal court order that froze the scheme. The Justice Department announced on Monday that it would comply with the temporary injunction imposed by District Judge Leonie Brinkema in Virginia, while US media reports citing senior officials indicated the White House was prepared to drop the fund altogether. The move came barely two weeks after its unveiling as part of a highly unusual legal settlement between the president and his own Internal Revenue Service.

Originating in a deal to end Trump’s lawsuit against the IRS for leaking his tax returns, the fund would have allowed individuals alleging they had been targeted by a ‘weaponised’ justice system under previous administrations to apply for compensation. Both Democrats and Republicans swiftly denounced it as a political slush fund with minimal oversight, warning it could benefit convicted participants in the January 6 Capitol riot. Republican senators, already uneasy, linked the fund’s removal to progress on a stalled $72 billion immigration enforcement package, intensifying the legislative pressure.

Viewed from European and Asian capitals, the fund’s collapse is the latest in a series of executive setbacks. Spanish daily El País described it as a ‘marcha atrás’ (retreat), while the German-language Neue Zürcher Zeitung characterised it as a capitulation to cross-party opposition. Indian newspaper The Hindu and Russia’s Interfax highlighted the rare combination of judicial and congressional resistance facing the White House. The global coverage underscores a broader perception that even a Republican-dominated Congress can push back against extra-legal executive arrangements.

The legal hazards for Trump, however, are far from over. The same settlement that created the fund also granted the president sweeping immunity from IRS audits — a provision Judge Brinkema has signalled she will scrutinise further. A separate inquiry in Washington is examining whether the settlement itself was lawful. Should the immunity clause be struck down, Trump could face renewed financial exposure in his long-running tax battles. More broadly, the affair suggests that arrangements testing the boundaries of public accountability will attract sustained judicial and political opposition.

The ‘anti-weaponisation’ fund now joins a growing list of Trump initiatives — from the triumphal arch project to the deportation of foreign students — that have been halted or curtailed. The pattern reinforces a key lesson of his second term: presidential power, however expansively interpreted, is not absolute. The fund’s demise complicates any effort to reward loyalists through opaque channels and leaves Trump without a central tool for shaping the victimisation narrative that remains core to his political identity.