The Trump administration announced on Wednesday that it would withhold $18 billion in federal infrastructure funds previously awarded in New York City, including funding for two major transportation projects.
In a statement, Sean Duffy, the transportation secretary, specifically mentioned the expansion of the Second Avenue subway line and the construction of new commuter train tunnels under the Hudson River, a $16 billion project known as Gateway.
“The department is focusing on these projects because they are arguably the largest infrastructure initiatives in the Western Hemisphere,” he added.
Mr. Duffy said that funds for the two projects would not be distributed while the Transportation Department reviewed what it described as New York State’s “discriminatory, unconstitutional contracting processes.”
The review was in response to President Trump’s executive orders earlier this year targeting diversity, equity and inclusion programs, Mr. Duffy said, and following a rule issued by the department on Tuesday that forbids recipients of federal transit funds from race- and sex-based contracting requirements.
As the Trump administration has begun carrying out its threats to freeze and claw back federal funds from states and cities that promote diversity initiatives or do not cooperate with it on federal immigration enforcement, New York has been a main target, with hundreds of millions of dollars withheld.
But this funding freeze is the largest yet in New York, and could have potentially widespread effects, disrupting a regional economy dependent on the movement of residents and commuters.
Gov. Kathy Hochul of New York described the announcement as the Trump administration’s latest salvo in its war on the state and its values. Earlier this week, Ms. Hochul said that the administration had cut an additional $100 million in counterterrorism funding in New York, following an earlier reduction of $87 million.
“They’ve decided to put their own interpretation of proper culture ahead of our needs, the needs of a nation,” Ms. Hochul, a Democrat, said at a news conference to discuss another topic involving Washington, the federal government shutdown. “You can’t make this up, folks. Just keeps getting worse and worse.”
It was not immediately clear whether the $18 billion involved just the Second Avenue Subway and the Gateway Project or other initiatives as well. Like other efforts by the Trump administration to withhold or delay federal funding to New York, the decision is likely to be challenged in court.
Former President Joseph R. Biden Jr.’s administration awarded the Metropolitan Transportation Authority $3.4 billion in federal funding in 2023 to extend the Q line on Second Avenue from the Upper East Side into Harlem and East Harlem, an expansion of a project that has been in the works for more than a century.
The following year, the Biden administration awarded billions in grants and financing for the Gateway Project, bringing the federal funding for the Gateway project to about $12 billion, about 70 percent of its total cost. The rest of the project, which would connect New Jersey and Pennsylvania Station in Manhattan, would be provided by New York State and New Jersey.
A spokesman for Gov. Philip D. Murphy of New Jersey, a Democrat, declined to comment.
Representative Josh Gottheimer, a New Jersey Democrat, called the funding freeze on the Gateway “an attack on the economy, labor, and American competitiveness.”
“If Trump wants America to win and to create jobs, he will immediately unfreeze the funding,” Mr. Gottheimer said in a statement.
The Gateway Development Commission, which oversees the Hudson tunnel project, held its monthly board meeting on Tuesday. No mention was made of a possible suspension of funding.
And at a Senate hearing in May, Mr. Duffy told Senator Kirsten Gillibrand of New York that he would not cancel federal grants that had been awarded for the two projects. “If you’re asking me if I plan on canceling those grant agreements, I do not,” he said.
It is unclear when the federal funding freeze could affect the infrastructure projects, which also have local backers. But the disruption, regardless of length, could have costly, long-term effects, said Tom Wright, the president of the Regional Plan Association, an urban planning group.
The Hudson River project, for instance, involves complex agreements with companies across the country.
“This is the worst thing you can do to a project that’s going to take a decade and includes 10 contracts, each of which is over a billion dollars, and about half of which are in progress,” Mr. Wright said.
The funding freeze could also set a dangerous precedent that makes private contractors wary of working on major public projects, without more and costlier assurances, he said.
And the longer the work is delayed, the higher the overrun costs will be. A month of delays could add tens of millions of dollars to the Hudson River project’s budget, Mr. Wright said.
Grace Ashford, Stefanos Chen and Patrick McGeehan contributed reporting.
Matthew Haag is a Times reporter covering the New York City economy and the intersection of real estate and politics in the region.
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