Space Policy Directive 1 says the NASA administrator should "lead an innovative and sustainable program of exploration with commercial and global partners to enable human expansion across the solar system and to bring back to Earth new knowledge and opportunities".
The president signed the Space Policy Directive-1 on the 45th anniversary of the last crew mission to land on the moon, which was Apollo 17 lunar lander that touched down on the moon December 11, 1972.
The Commercial Spaceflight Federation - a member organization for human spaceflight companies - released this statement from its president, Eric Stallmer: "CSF applauds President Trump for signing Space Policy Directive 1, which directs NASA to partner with the US commercial space industry to return Americans to the Moon".
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Trump signed the space policy on Monday, which also marked the 45th anniversary of the Apollo 17 mission, which was the last time humans walked on the moon.
The policy grew from a unanimous recommendation by the US National Space Council, chaired by Vice-President Mike Pence, after its first meeting October 5th. "This time we will not only plant our flag and leave our footprint - we will establish a foundation for an eventual mission to Mars and perhaps someday to many worlds beyond".
Space policy experts agree that any attempt to send people to Mars, which lies an average of 140 million miles (225 million kilometers) from Earth, would require huge technical prowess and a massive wallet.
Harrison "Jack" Schmitt, the last living astronaut who was a part of the Apollo 17 mission, was also present at the ceremony.
Only 12 men have set foot on the Moon - all have been Americans.
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"We are the leader and we're going to stay the leader", Trump said.
Past presidents, including George H.W. Bush and George W. Bush, have also proposed returning to the moon and missions to Mars, but budget constraints derailed their plans.
"This is a giant step toward that inspiring future", Mr. Trump said.
"We're dreaming big", he added.
In approving the new policy, Mr Trump abandoned what had been a goal of his predecessor, Barack Obama, who in 2010 backed a plan to send humans to a near-Earth asteroid.
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