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The flurry of executive orders and directives by President Donald Trump and his newly confirmed cabinet chiefs to modify or cut Biden administration policies have some in the construction sector optimistic. But the actions also are disrupting key government functions with impacts feared for construction industry operations and costs.
Changing mandates cover everything from transportation and energy funding policies to tariffs on materials and bans on federal diversity, equity and inclusion rules extending to contractors. The status of rules and impacts of federal project award activity, firing of workers and Elon Musk’s unscripted government cost-cutting blitz remain unclear, and even troubling to many.
Court orders in recent weeks to pause administration moves to halt allocated funding are the beginning of more legal battle, despite Trump press secretary Karoline Leavitt’s statement that the White House „will continue to fight these battles in court, and we expect to be vindicated.” A final appeals court ruling—related to suits brought by 22 states, Washington, D.C., and two private groups—that is expected shortly may not bring that result, and media and observers speculate on how or whether the administration will comply if ordered.
Pushing forward on policy, the administration announced on Feb. 14 its new “energy council,” led by Interior Secretary Douglas Burgum and Energy Secretary Chris Wright and including U.S. Environmental Protection Agency chief Lee Zeldin, to centralize under closer White House control its plan for “ENERGY DOMINANCE,” as a government social media post exclaimed. As council chair, Burgum also can join meetings of the National Security Council. Names of other council members were not released
The council’s 100-day mission is to raise awareness on energy needs—primarily focused on fossil fuel—develop actions to increase production, attract private sector investment and push innovation over “totally unnecessary regulation,” it said.
Fossil fuel production reached record levels under President Joe Biden, despite his moves to cut oil and gas drilling on public lands and water. “Now we need to turn that around 180 degrees and unleash that potential,” Burgum said.
DOE’s Wright also issued Feb. 14 the first agency green light to export liquefied natural gas to non-free trade agreement countries since the Biden administration halted those in early 2024, a move reversed by court order later in the year. Approved was the proposed 9.5-million-ton-per-year Commonwealth LNG project in Cameron Parish, La. The Federal Energy Regulatory Commission also OK’ed the supplementary environmental impact review for the estimated $4.8-billion project, which is set to make its final investment decision in September, with first production set for first quarter 2029. Technip Energies and Baker Hughes are two key project contractors. Private equity firm Kimmeridge acquired a 90% stake in the project last year.
„Because Commonwealth is a modular build, we view ourselves, as we look at where we are in the market, as some of the lowest-cost of a greenfield development and slightly higher than a brownfield development,” Kimmeridge Managing Partner Ben Dell told S&P Global in November. DOE also has extended to March 20 the comment period for the previously proposed DOE analysis of LNG export issues.
In signing his „energy emergency” order, Trump also has aired intent to resurrect the 124-mile Constitution gas pipeline project from Pennsylvania to New York that was abandoned by developer Williams Co. in 2020 when New York state officials blocked it over proposed water-quality impacts. In media comments last month, he claimed the project would boost northeast state energy supply and cut prices by up to 70%.
,major.#Americanairlinescrash#plumbersunionUA#KiewitMeanwhile, construction and engineering trade groups are still uncertain what the freeze means for their members. Tom Smith, executive director of the American Society of Civil Engineers, notes that although ASCE’s members span the full range of views on the political spectrum, engineers and others involved with planning infrastructure programs “want certainty” about funding levels. Smith said ASCE and its members are speaking with their lawmakers to push for the continued release of funding that has already been appropriated under the Bipartisan Infrastructure law and the Inflation Reduction Act.Ben Brubeck, Associated Builders and Contractors’ vice president of regulatory, labor and state affairs, adds: “Associated Builders and Contractors is in touch with the Trump administration seeking clarity on how these freezes will affect member contractors and their projects, and we await additional guidance explaining the scope of the freezes. In the interim, ABC is encouraging members to have continuing conversations with their federal agency partners, customers and stakeholders receiving federal grants.”A federal judge in Rhode Island late on Jan. 31 issued a temporary restraining order barring the Trump administration from freezing federal funding,I“The declarations and evidence presented by Plaintiffs paint a stark picture of nationwide panic in the wake of the funding freeze. Organizations with every conceivable mission — healthcare, scientific research, emergency shelters, and more — were shut out of funding portals or denied critical resources“Because the funding freeze threatens the lifeline that keeps countless organizations operational, plaintiffs have met their burden of showing irreparable harm.”and, if allowed to proceed, would constitute an extraordinary intrusion into the Executive Branch,” the Justice Department wrote in court filings Monday. But said Alikah n their motion, lawyers for Trump’s Justice Department argued the federal court in Rhode Island lacked jurisdiction and the plaintiffs couldn’t use an order that was aimed initially against the OMB memo to seek broader action. They also argued that Trump and the OMB “plainly have authority to direct agencies to fully implement the President’s agenda, consistent with each individual agency’s underlying statutory authorities.”“The President’s authority to direct subordinate agencies to implement his agenda, subject to those agencies’ own statutory authorities, is well-established,” Brett Shumate, the acting assistant attorney general, wrote.“The Executive Branch has a duty to align federal spending and action with the will of the people as expressed through congressional appropriations, not through ‘Presidential priorities,’” McConnell wrote.In this image provided by the U.S. Coast Guard, wreckage is seen in the Potomac River near Ronald Reagan Washington National Airport, Thursday, Jan. 30, 2025 in Washington. (Petty Officer 1st Class Brandon Giles, U.S. Coast Guard via AP)Also potentially affected are state and local government grants and loans awarded under the Inflation Reduction Act and Infrastructure Investment and Jobs Act, with online publication Heatmap posting a list of targeted federal climate, energy, disaster assistance, environmental, tax credit and other programs based on government data obtained by States Newsroom not specifically confirmed by OMB. But noted on the list and in media reports as potentially at risk is funding for energy programs such as oil and gas orphan well cleanup and a U.S. hydrogen production and research boost from $7 billion in Biden Administration funding awarded to seven new public-private hubs. “The Court must act in these early stages of the litigation under the ‘worst case scenario’ because the breadth and ambiguity of the Executive’s action makes it impossible to do otherwise,” McConnell wrote.“This is NOT a rescission of the federal funding freeze,” the White House press secretary, Karoline Leavitt, said on Wednesday, in a social-media post that was introduced as evidence in the lawsuit. She added that the president’s executive orders “on federal funding remain in full force and effect, and will be rigorously implemented.”https://docs.google.com/spreadsheets/d/1NcvagFXXbUxwN5jmZPAIFYBzPfMqgSj08OGdDpo-9O0/edit?gid=552419496#gid=552419496 Also, 22 Democratic state attorneys general, with the District of Columbia, filed suit in that court against the Trump administration OMB freeze. States are New York, California, Illinois, Massachusetts, New Jersey, Rhode Island. Arizona, Colorado, Connecticut, Delaware, Hawaii, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Vermont, Washington and Wisconsin. . utility regulators moved to tighten safety requirements for lithium-ion battery facilities in the wake of a fire that ravaged one of the world’s largest battery energy storage facilities. In a proposed rule change published Jan. 27, the California Public Utilities Commission (CPUC) seeks to add new maintenance and operational regulations and improve emergency response. “The proposal also makes explicit that the CPUC requires battery storage facility owners to develop emergency response and emergency action plans,” the CPUC says in a statement. The move comes less than two weeks after a fire destroyed most of a 300-MW lithium-ion battery array at Vistra Energy’s 750-MW Moss Landing storage facility and forced those near the plant to evacuate. That incident, along with earlier near-fires, led a unanimous Monterey County Board of Supervisors to urge that Moss Landing remain offline while the fire is investigated. The CPUC response was “an important next step for assuring communities that accidents like this won’t happen again,” says Dustin Mulvaney, in the face of shortsighted governing, the BlueGreen Alliance will continue to support offshore wind development and partner with labor and environmental advocates committed to growing this burgeoning domestic industry.”. JasonWalsh, ED of Blue-Green Alliance, made up of unions, enviro groups and other clean energy stakeholders.temporarily halted offshore wind lease sales in federal waters and paused the approval of leases, permits and loans for both offshore and onshore wind energy projects the US Outer Continental Shelf (s had expected and is certain to draw legal challenges.Today’s executive order pausing offshore wind leasing and permitting is a blow to the American offshore wind industry and hurts the hundreds of U.S. supply chain companies and thousands of workers already building more American energy. Today’s actions threaten to strand $25 billion already flowing into new ports, vessels, and manufacturing centers, and curtail future investments across our country. We urge the administration to reverse this sweeping action and keep America working in offshore energy as part of its commitment to an “all-of-the-above” energy strategy.US President Donald Trump’s executive order to ban new seabed leases for offshore wind likely will only have a “limited impact” on European companies, whose main market remains domestic, wind industry representatives told Recharge.“It is not a good day for offshore wind in the US. But we are taking care of Europe,” a WindEurope spokesperson said.and the global influence of malign and adversarial states;“This is a new day for American energy,” Mike Sommers, the president of the American Petroleum Institute, said in a statement,This news is important because it’s the first time any utility company is seriously considering a pathway to own and operate a fusion pilot plant.Burgum replied: „I’m not familiar with every project that the Interior has under way, but I’ll certainly be taking a look at all of those and if they make sense and they’re already in law, then they’ll continue.” Earlier in the week Trump posted on the Truth Social platform: “Windmills are an economic and environmental disaster.”
EPA also said it expects to halt regulation of methane, a strong greenhouse gas released from leaking oil and gas equipment, while its administrator Zeldin said he wants to claw back $20 billion approved by the Biden government for climate projects, particularly in „overburdened” communities. In a social media post, he said the funds were awarded in “a rush job with reduced oversight,” but neither Zeldin nor the agency has cited detail, media accounts say.
Burgum has criticized renewable energy sources like wind and solar for not producing dispatchable power, with planned permit restrictions expected. Despite political and economic impacts on renewable energy growth in recent years, it now accounts for more than 20% 0f U.S. power generated, about double what it was in 2010, says the U.S. Energy Information Administration. Natural gas grew to 43% from 24% in 2010, the agency said.
Buyers will still be key. In its latest move for power supply, technology giant Microsoft said Feb. 10 it will buy nearly 400 MW of power from three new utility-scale solar projects it developed in Illinois and Texas with Volt Energy Utility, a minority-owned renewable energy developer. “It’s exciting when projects achieve commercial operations and begin generating clean energy in support of grid decarbonization,” said Kourtney Nelson, firm senior director of renewable energy procurement.
Bob Blue, CEO of the $10.7-billion Coastal Virginia Offshore Wind project, told investors in a 2024 company results call on Feb. 13 that Trump edicts targeted at the offshore wind sector would not impact his project, now on track to have 2.6 GW of large wind turbines, 1788 in number, installed by the end of 2026. He said any move to halt the project, seen by the state as key to its surging power need as a data center hub, „would be the most inflationary action that could be taken with respect to energy in Virginia.”
Investment firm Stonepeak, which acquired last year a 50% share in the wind project, remains bullish on energy transition infrastructure, including wind, grid upgrades and carbon capture, CEO Michael Dorrall told investors on its own latest quarter earnings call, according to a report in Infrastructure Investor, that „the hardest thing for an investor is when goal posts keep moving.”
Transportation Shifts
In his policy directive just after confirmation, Transportation Secretary Sean Duffy announced project funding shifts—including favoring states with higher birth and marriage rates, those „in compliance … with federal immigration enforcement, where possible,” those without vaccine or mask mandates and those pushing a user-pay strategy. Social cost of carbon analyses also are dropped from projects, which were targeted by conservatives for „social engineering.”
But DOT’s birth-rate provision also, „on its face, is social engineering,” said Connecticut Senate Democrat Richard Blumenthal. “It is patently discriminatory if you look at the numbers,” predicting courts will remove it when challenged. The American Roads & Transportation Builders Association supported an industry lawsuit against the cost of carbon rule—but voiced concern that the new birth-rate funding policy „could influence where infrastructure projects are funded based on demographic factors rather than need.”
Duffy, a former congressman, „seems unsure whether he wants a complete overhaul
of USDOT programs or the speedy advancement of infrastructure projects,” said the Rail Passengers Association.
Related to workforce, Duffy said he rescinded the DOT’s DEI policies, as have other federal agencies, but the rules for government-wide federal contractors are not clear. „There could be legal repercussions and hefty penalties for crossing the line on diversity, equity and inclusion—a line the administration hasn’t clearly defined,” said Bloomberg Law on Feb. 13. „At the same time, existing contracts obligate these companies to maintain hiring policies they’ve been practicing for decades.”
Contractors have until April 21 to comply, with agencies needing to first clarify rules and contract terms, say attorneys at law firm Arnold & Porter, pertaining to any enforcement. The Trump order „does not purport to unilaterally modify existing government contracts, and it would present serious legal questions were it to try. But the uncertainty facing contractors is real,” for now.
Although the department has not yet outlined a move to reverse a Biden-era mandate for union-tilted labor agreements covering pay rates and jobsite rules for projects of $35 million or more, as the U.S Defense Dept. did this month, an industry coalition now seeks a Trump executive order to rescind the pacts government-wide.
With Republican leaders so far not crossing Trump on any major order provisions, the Senate is nearly finished in confirming his nominees, who included controversial hard-liner Russell Vought at the Office of Management and Budget. But the sudden shutdown Feb. 4 of the U.S. Agency for International Development—which manages a multibillion-dollar construction portfolio—has caused some bipartisan congressional upset over Vought’s role and Musk’s authority to intervene in federal agency staffing and funding reviews.
Ir is not clear how or whether either has influenced recent directives calling for 2,300 firings at the Interior Dept. and 400 at EPA, among others, media reports said, with most classified as newly hired „probationary” employees.
Tariffs: Real or Dealmaking Tactics?
Adding to the level of uncertainty ahead in Washington are Trump’s proposed tariffs, with the administration announcing on Feb. 13 the newest—”reciprocal” levies that would raise charges against a number of countries to what they charge the U.S. for thousands of products, with no effective date noted. Commerce Secretary Howard Lutnick and others are set to announce tariff details in an April 1 report, the White House said.
While original 25% levies on Canada and Mexico are paused until March 1, a 10% levy against China now is in effect. Sarah Martin, associate director of forecasting for Dodge Construction Network, says that with 70% of U.S. softwood lumber and gypsum imports sourced from North American neighbors, “nonresidential sector firms will see more vulnerability to supply chain disruptions and material shortages.”
Also at risk are needed power imports to border regions such as New York state, with Ontario and British Columbia threatening to restrict supply if tariffs take effect, according to a Feb. 11 S&P Global research note. “There are opportunities … to actually move away from the conversation about tariffs,” Canada energy minister Jonathan Wilkinson told a global energy conference in Washington earlier this month, reported by S&P Global.
Tariffs may also impact energy industry critical component costs, such as U.S. imports of electrical transmission transformers from Mexico, amid a current global shortage. “One option … is to focus on … working more closely on critical minerals and energy,” Wilkinson said, calling for a formal binational alliance since Canada is a major global supplier.
But a 10% tariff on China imports remains, generating retaliatory levies.
Trump also announced 25% tariffs on steel and aluminum late on Feb. 10, elevated from 10%, for all global exporters to the U.S., including allies Australia, the European Union, South Korea, Vietnam and Japan, effective March 12. China exported about 892,000 metric tons of finished steel to the U.S. in 2024, up 5.5% from 2023, according to sector research firm CEIC. But these accounted for 0.8% of China’s steel exports.
An EU official promised “firm and proportionate countermeasures,” but no retaliatory tariff has been detailed.
If tariffs move beyond immediate administration negotiating tactics, upward pressure on raw materials prices “will eventually translate into higher bid prices for construction and infrastructure projects,” says Macrina Wilkins, AGC senior research analyst. “It will take time for domestic producers to scale up to meet demand.”
