GENEVA (Reuters) -The United States has paused contributions to the World Trade Organization, three trade sources told Reuters, as U.S. President Donald Trump's administration ramps up efforts to cut government spending.

The Trump administration is retreating from global institutions it sees as at odds with his "America First" economic policies. It plans to quit some, such as the World Health Organization, and has cut contributions to others as part of a broad review of federal spending.

The WTO has already been hobbled by a U.S. move in 2019 during Trump's first term to block new judge appointments to its top appeals court, which left its key dispute settlement system only partially functional. Washington had accused the WTO Appellate Body of judicial overreach in trade disputes.

The Geneva-based trade watchdog had an annual budget of 205 million Swiss francs ($232.06 million) in 2024. The United States was due to contribute about 11% of that based on a fees system that is proportionate to its share of global trade, according to public WTO documents.

A U.S. delegate told a March 4 WTO budget meeting that its payments to the 2024 and 2025 budgets were on hold pending a review of contributions to international organisations and that it would inform the WTO of the outcome at an unspecified date, two trade sources with direct knowledge of the meeting said.

A third trade source confirmed their account and said the WTO was coming up with a "Plan B" in case of a prolonged funding pause, without elaborating.

All three sources asked for confidentiality because the budget meeting was private and the U.S. funding pause has not been formally announced.

The White House did not immediately respond to requests for comment. 

A State Department spokesperson said Trump last month signed an executive order directing Secretary of State Marco Rubio to review within 180 days all international organizations the U.S. is a member of "to determine if they are contrary to U.S. interests."

"Funding for the WTO, along with other international organizations, is currently under review," the spokesperson said. An official from the office of the U.S. Trade Representative said on Friday that the Secretary of State was conducting a "general review of U.S. funding to all international organizations". "USTR is coordinating with the State Department as it relates to the WTO."

WTO spokesperson Ismaila Dieng said that U.S. contributions had been on the way but "got caught up in the pause of all payments to international agencies".

"Generally, arrears can impact the operational capacity of the WTO Secretariat. But the Secretariat continues to manage its resources prudently and has plans in place to enable it to operate within the financial limitations imposed by any arrears," he said, referring further questions to U.S. authorities.

As of end-December 2024, the United States had arrears of 22.7 million Swiss francs ($25.70 million), according to a WTO document obtained by Reuters marked "RESTRICTED" and dated February 21.

Under WTO rules, any member that fails to pay its dues after more than a year is subject to "administrative measures" - a series of punitive steps that get progressively stricter the longer the fees go unpaid.

The country is now classified as being in the first of three such categories, two of the trade sources confirmed to Reuters, which means its representatives can no longer preside over WTO bodies nor receive formal documentation.

Reuters could not immediately establish if the WTO was already applying these measures to the United States.

William Reinsch, a former U.S. Commerce official now at the Center for Strategic and International Studies, said he thought the U.S. would eventually pay its WTO bill. He said the Trump administration had nominated a U.S. ambassador to the institution, which indicated some desire to remain engaged.

WTO spokesperson Dieng confirmed the chair of the budget committee had informed WTO members that the United States was currently in "Category 1 arrears", along with other countries.

"It remains the responsibility of WTO Members to implement the consequences associated with arrears," he said.

As of end-2024, five other member countries - Bolivia, Democratic Republic of Congo, Djibouti, Gabon and Gambia - were in that category, the WTO restricted document showed.

A total 38.4 million Swiss francs of contributions were outstanding, including unpaid fees from 2024 and prior, it showed.

($1 = 0.8834 Swiss francs)

(Additional reporting by Andrea Shalal and Daphne Psaledakis in Washington and Jarrett Renshaw in PhiladelphiaEditing by Mark John and Catherine Evans, Kirsten Donovan)