The United States has cancelled $300m (£231m) in aid to Pakistan.
The Pentagon said the decision was down to what it perceived as Islamabad’s lack of “decisive actions” against militants.
The move comes just a day after President Donald Trump announced he would no longer fund the UN Relief and Works Agency (UNRWA) which helps Palestinian refugees.
Earlier this year Mr Trump suspended so-called coalition support funds, accusing Pakistan of rewarding past assistance with “nothing but lies and deceit”.
The Trump administration accused Islamabad of granting safe haven to insurgents waging war in neighbouring Afghanistan.
The White House believes Pakistan’s Inter-Services Intelligence government agency and other military bodies have long helped fund and arm the Taliban for ideological reasons.
Pakistan denies these claims.
The aid originally earmarked for Pakistan will now be spent on “other urgent priorities”, according to Pentagon spokesman Lieutenant Colonel Kone Faulkner.
“We continue to press Pakistan to indiscriminately target all terrorist groups,” he said.
He said further funding stripped from Pakistan aid earlier this year brought the total withheld to $800m (£617m).
The White House hopes the move to cut back aid to Pakistan will hasten the end of the 17-year Afghan conflict.
It is America’s longest war and is understood to have cost the States billions if not trillions of dollars.
Despite anti-American feeling in the country, it remains necessary for the US to co-operate with Pakistan which is still believed to have the strongest influence over the Taliban in Afghanistan.
The announcement comes days before US secretary of state Mike Pompeo and top US military officer General Joseph Dunford are due to visit Islamabad to meet new Pakistani prime minister Imran Khan.
The challenge of combating militants in the area will form a large part of the discussions.
Pakistan is due to decide whether to seek assistance from the International Monetary Fund (IMF) in a bid to aid its ailing economy.
The US has the largest share of votes at the IMF.