Announcing the decision on Twitter, Trump said the military would not "allow or accept" transgender service members, reversing a major last year's decision of his predecessor Barack Obama.
"After consultation with my Generals and military experts, please be advised that the US Government will not accept or allow transgender individuals toserve in any capacity in the US Military," Trump said in a series of tweets.
"Our military must be focused on decisive and overwhelming victory and cannot be burdened with the tremendous medical costs and disruption that transgender in the military would entail," Trump wrote.
Announcing the decision on June 30, the then Defence Secretary Ashton Carter had argued that the Defence Department and the military needed to avail themselves of all talent possible in order to remain the finest fighting force the world has ever known.
Last July, the Pentagon lifted a long-standing ban against transgender men and women serving openly in the military, removing one of its last discriminatory hurdles and placing gender identity on par discrimination based on race, religion, colour, sex and sexual orientation.
In 2015, the administration opened all combat positions to women and in 2016 appointed the first openly gay Secretary of the Army, Eric K Fanning, local media reported.
The Obama plan allowed transgender service members currently on duty to immediately serve openly. Armed services had to come up with medical and training plans and until July 1, 2017, for full implementation. The Trump administration initially pushed that date back, and now has reversed the policy.
While there is no definitive data on the number of transgender service members, Carter had said that according to RAND, an US global policy think tank, there were about 2,500 people out of approximately 1.3 million active-duty service members, and about 1,500 out of 825,000 reserve service members who were transgenders.
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