It is not clear how many millions of dollars in aid are being affected, or for how long but a congressional source said the US has decided to cut $100 million in aid.
The two countries are suspending tripartite negotiations with Ethiopia over its multi-billion-dollar dam on the Blue Nile for more internal consultations on a new draft of filling guidelines.
The federal court invalidated Canada's Safe Third Country Agreement with Washington barring people from seeking asylum if they arrive from US soil.
Egypt and Sudan view the dam as a threat to vital water supplies, while Ethiopia considers it essential for its electrification and development.
While data is scant, models and anti-trafficking activists say abuse in the sector is rife for African hopefuls - due to a lack of oversight and guidance both on the continent and abroad.
Egypt and Sudan have been warning Ethiopia against filling the dam, but there are conflicting reports coming out of the country.
Ethiopia’s latest round of talks with Egypt and Sudan on an agreement over the dam’s operation failed early this week.
Over 3,000 people have been arrested in more than a week of protests following the killing of popular singer and activist Hachalu Hundessa, a hero to many Oromo who saw him as the voice of their marginalisation.
Pop star Hachalu, a member of the Oromo ethnic group, Ethiopia's largest, was shot dead by unknown attackers in Addis Ababa on Monday night, fuelling ethnic tensions.
At least two people shot dead as soldiers opened fire on mourners in the singer's hometown Ambo as they headed to the service.
Police say 81 people were killed including three Oromia special police force members after protests sparked by assassination of popular singer Haacaaluu Hundeessaa.
Jawar Mohammed is a former media mogul who recently joined the opposition Oromo Federalist Congress and has a large support base in Ethiopia's Oromia region.
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