As a new Donald Trump presidency begins in the United States, there are reasons to be both optimistic and pessimistic about how he might approach investment in the country’s infrastructure.
A number of these ideologically defining actions of what the new Republican presidency could look like came from the 46 presidential actions Trump issued on 20 January, his first day in office.
While these included a ban on offshore wind, an acceleration of fossil fuel extraction projects, pardoning more than 1,000 participants in the 6 January 2021 storming of the Capitol building and the withdrawal from the World Health Organisation, Trump also “immediately paused the disbursement of funds” under the previous president Joe Biden’s 2021 infrastructure law.
In November 2021, Biden signed the Infrastructure Investment and Jobs Act, which is known to many as the $1.2 trillion (£970bn) Bipartisan Infrastructure Law. This bold move from the democratic administration was the largest long-term investment in the US’s infrastructure in the history of the nation and planned to provide $550bn (£446bn) from 2022 through to 2026 for investment for rail, roads, bridges, mass transit and water infrastructure.
Now Trump has paused the disbursement of these funds, a number of projects that have commenced development, or even begun construction, will be unsure if the funding is there for them to be completed.
While this could be deemed as worrying for both the construction and infrastructure industries, White House press secretary Karoline Leavitt stated on Tuesday 21 January, a “massive” infrastructure announcement was in due course. A number of US political commentators have stated this could relate to an “unrealised promise” during the president’s first term in charge to upgrade America’s aging roads and bridges. This undelivered promise concerns his vision to push a $1 trillion (£810bn) infrastructure bill through congress in 2016.
Industry take
Regardless of whether the funds allocated under Biden will still be enabled for the concerned projects, a number of industry players are confident that the infrastructure and construction industries will still boom under the new Trump presidency.
London-based law firm Holland & Knight partner Robert S. Bernstein has argued that Trump’s career in construction has made many believe that he will be a champion for the construction and infrastructure sectors in his second term.
“While we don’t know the future, we can look to the past, president Trump’s first term, for clues about what is to come,” he said.
“During his first term, president Trump emphasised the importance of energy projects, stating that blocking them undermines national security.
“During the 2024 campaign and after the election, Trump promised more of the same, most recently saying that he would revoke the Biden administration’s offshore drilling ban on his first day in office.
“Expect Trump to be a vocal champion of construction and infrastructure in his second term and to take legislative actions to encourage ambitious projects. Though some Trump positions, most notably on immigration and trade, may present challenges that could be a counterweight, those positions are likely to be moderated.”
Where rail is concerned, Arcadis global president for mobility Greg Steele believes that much will be the same going forward from Biden’s presidency to Trumps.
“I think there’s been a shift in public sentiment,” he said. “The US is very like the UK, it’s very big on social equity and access and I think rail drives a lot of that.
“For instance, we’re working on East San Fernando Valley Light Rail in California, that transit line gives access to a community where over 30% don’t have access to a vehicle or a car.
“That’s where the US really is strong.”
Steele believes economic development will still be very important under Trump. Cities like New York, San Francisco and Miami will still see public transport as the backbone of mass transit. “Those states and the local government still fund a lot of this,” he said. “I don’t anticipate a big shift.”
With this being said, during Trump’s first term passenger rail was not a primary focus and Holland & Knight legislative assistant Thomas Freeman has argued past actions and campaign statements indicate rail is unlikely to become a priority in his new term.
“The shift in passenger rail policy may include reduced federal support for existing passenger rail services and high-speed rail projects,” he said. “Additionally, public transit systems, which rely on federal funding, could face challenges in securing resources for the maintenance and expansion of rail systems due to cuts in discretionary transportation funding.
“Deregulation of the passenger and freight rail industries, which Trump pursued in his first term, will likely resume in his second term.”
In contrast to Biden’s rail-focused infrastructure spending, which directed billions to Amtrak, many believe the Trump administration may attempt to reduce funding for the Amtrak Northeast Corridor (NEC) and Amtrak National Network accounts. Budget proposals during President Trump’s first term often recommended cutting Amtrak’s funding by up to 50%, as Freeman pointed out, and eliminating Amtrak’s long-distance routes.
Even with these challenges, Freeman believes the potential setbacks offer an opportunity for the US rail industry.
“Though a second Trump administration may pose challenges for passenger rail, the rail industry has a unique opportunity to engage proactively with the incoming administration by attempting to align its goals with the administration’s priorities,” he said.
“Industry stakeholders should make a compelling case for continued investment in passenger rail by emphasising economic benefits such as job creation, support for the US transportation supply chain and regional connectivity.
“By engaging in constructive dialogue about deregulation, the industry can work with the administration to ensure that safety and efficiency are maintained while embracing technological advancements.”
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