Trump administration’s New York tunnel freeze cost the project millions of dollars – court filing

Trump administration’s New York tunnel freeze cost the project millions of dollars – court filing

Trump Administration’s Hudson Tunnel Funding Freeze Sparks Legal Action and Financial Uncertainty

The Trump administration’s indefinite freeze of federal funding for the $16 billion Hudson Tunnel Project has triggered legal challenges from New York and New Jersey, with states alleging the move jeopardizes economic growth, jobs, and infrastructure progress. As of February 17, 2026, the U.S. Department of Transportation (USDOT) had released $107 million of the $205 million in frozen funds requested since October 2025, including a recent $77 million disbursement. However, construction remains paused, with project officials stating efforts are underway to "get workers back on the job".

New York Governor Kathy Hochul and New Jersey Governor Mikie Sherrill filed a federal lawsuit on February 3, 2026, alleging the freeze violates federal commitments and threatens $15 billion in allocated funding for the Gateway Project. The lawsuit seeks emergency relief to halt the funding suspension, citing risks of immediate job losses for 1,000 workers and long-term economic harm to the Northeast region. Both states emphasized that the freeze undermines their investments in the project, including land and financial contributions, and could force them to incur additional costs to secure construction sites and mitigate public safety risks.

The Gateway Development Commission, overseeing the project, separately sued USDOT earlier in February. Legal experts note the states' case hinges on proving the freeze is arbitrary and capricious under federal law, with potential outcomes influencing broader infrastructure policy.

While the released funds provide temporary relief, the prolonged uncertainty has already strained project timelines and budgets. Analysts warn that further delays could increase costs for taxpayers and reduce the project's long-term economic benefits, including improved rail capacity for 200,000 daily commuters. The case remains pending, with both sides preparing for potential court rulings.

Reuters, Feb. 17, 2026: Reuters, Feb. 17, 2026.
New York Governor's Office, Feb. 3, 2026: New York Governor's Office, Feb. 3, 2026.