A United States judge has blocked the construction of a controversial oil pipeline from Canada to the US.
Trump, a Republican, said the project would lower consumer fuel prices, create jobs and reduce US dependence on foreign oil.
The ruling is temporary and requires the government to do a more thorough review of how the project might affect the climate, cultural resources and wildlife.
Doug Hayes, a lawyer for the Sierra Club environmental group, said the ruling made clear it was it was time to give up on the "Keystone XL pipe dream".
The pipeline was being prepared by TransCanada.
Neither TransCanada nor the State Department could immediately be reached for comment on the ruling. The Trump administration can appeal to a higher court.
TransCanada Corp's almost 1,200-mile pipeline has become one of the major battlegrounds in the climate change debate and, if completed, would carry an estimated 800,000 barrels per day from Canada's tar sands pits to Gulf Coast refineries in the US. Native American groups in Montana and elsewhere fought the Keystone project as well, saying its route failed to adhere to historical treaty boundaries and would impinge on their water systems and sacred lands.
The proposed USA portion of the pipeline would run about 875 miles through Montana, South Dakota and Nebraska.
"And frankly, approving this project would have undercut that global leadership", he said, adding that the "biggest risk" the US faced was "not acting".
"The department's 2017 conclusory analysis that climate-related impacts from Keystone subsequently would prove inconsequential and its corresponding reliance on this conclusion as a centerpiece of its policy change required the department to provide a 'reasoned explanation, '" Judge Morris said.
In 2015, on the eve of the global climate talks in Paris, the Obama administration appeared to bring an end to the seven-year-long saga when it announced it was halting construction of the pipeline, arguing that approval would compromise the country's effort to reduce its greenhouse gas emissions.
Since its conception, the pipeline has sparked a backlash from environmentalists and indigenous peoples who say it violates historical treaty boundaries and would bring environmental problems.
The judge also argued that the State Department failed to properly account for factors such as low oil prices, the cumulative impacts of greenhouse gases from the pipeline and the risk of oil spills.
"An agency can not simply disregard contrary or inconvenient factual determinations that it made in the past", Morris wrote Thursday.
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