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. Approval went to the proposed 9.5-million ton-per- year Commonwealth LNG project in Cameron Parish, La.  The Federal Energy Regulatory Commission also approved the supplementary environment impact review for the estimated $4.8-billion project, which said it would 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.

“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,” Managing Partner Ben Dell told S&P Global in November.

DOE also has extended to March 20 the comment period for a previously proposed DOE analysis of LNG export issues, and it postponed Biden energy efficiency rules for seven home appliances, also adding natural gas tankless water heaters to the list.

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 administration 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 he 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. 

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 and 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.” 

In an opinion this month, Atlanta Constitution columnist Doug Turnbull, known as “Gridlock Guy,” termed the provisions “absurd.” adding that “immigration enforcement and transportation
funding go together like spaghetti and tuna fish.”  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 policies, Duffy also said he rescinded the department’s DEI policies, as have other agencies, but the rules for government-wide federal contractors are very opaque. “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 orovisions, the Senate is about 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 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 Chiina 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, he said, calling for a formal binational alliance. Canada is a major global supplier of zinc, nickel, copper and graphite, used in “a range of American economic sectors,” Wilkinson said. 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 on 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.”