The court voted 5-4 on Tuesday to grant a Trump administration request to lift injuctions blocking the policy while other challenges continue in the lower courts.
Mr Trump’s policy prevents “transgender persons who require or have already undergone transition” from serving in the US military. He announced the policy on Twitter in 2017 saying the country would no longer “accept or allow” transgender Americans to service in the military because of “tremendous medical costs” and “disruption.”
The court’s five conservative justices greenlighted the plan, while its four liberal members voted against it.
The Trump administration had urged the court to take up other individual cases about the policy directly, but it declined. Instead, those cases will move through lower courts.
Under President Barack Obama, the military announced in 2016 that transgender people already serving in the military would be allowed to serve openly.
Before then, they could be discharged on the basis they were transgender.
The military set July 1, 2017 as the date when transgender individuals would be allowed to enlist.
Groups representing transgender individuals sued and the Trump administration lost early rounds in those cases with courts issuing nationwide injunctions barring the administration from altering course.
The Supreme Court on Tuesday lifted those preliminary injunctions.
In March 2018, the Trump administration announced that after studying the issue it was revising the policy.
The new policy generally bars transgender individuals from serving unless they serve “in their biological sex” and do not seek to undergo a gender transition.
The policy has an exception for transgender troops who relied on the Obama-era rules to begin the process of changing their gender, allowing them to continue to serve.
The military said last year that over 900 men and women have done so.
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