Trump Administration Sued Over Suspension of Critical Hudson River Tunnel Funding

New York and New Jersey have filed an emergency lawsuit against the Trump administration, seeking to restore federal funding for the $16 billion Hudson River tunnel project, a critical piece of U.S. transportation infrastructure linking New Jersey and Manhattan. The lawsuit, filed late Tuesday in U.S. District Court in Manhattan, aims to prevent construction from halting as early as Friday due to a funding freeze.

The legal action was brought by New York Attorney General Letitia James and acting New Jersey Attorney General Jennifer Davenport. It follows a separate court challenge filed earlier this week by the Gateway Development Commission, the agency overseeing the project. Gateway has warned that without immediate funding, construction will stop and approximately 1,000 workers could lose their jobs.

The Hudson River tunnel project, often referred to as the Gateway Tunnel Project, is considered the linchpin of rail travel between New York and New Jersey. It involves repairing the existing tunnel built in 1910 and constructing a new tunnel for Amtrak and regional commuter rail lines. The current tunnel suffered extensive damage during Hurricane Sandy in 2012, raising concerns about reliability and safety. Any failure would severely disrupt commuting in a region responsible for roughly 10% of U.S. economic output, impacting more than 200,000 daily travelers and 425 trains.

According to the lawsuit, the Trump administration suspended funding approved under former President Joe Biden for political reasons, alleging an effort to punish Democratic-led states. The suit names Transportation Secretary Sean Duffy along with senior officials at the Federal Railroad Administration and Federal Transit Administration.

The U.S. Department of Transportation has accused the Gateway project of violating federal rules related to the Disadvantaged Business Enterprise program, a claim Gateway disputes, stating it remains in full compliance with the law. Nearly $2 billion has already been spent on the project, which had secured approximately $15 billion in federal support.

The White House has pushed back, arguing that Democrats are blocking negotiations and linking the dispute to broader policy disagreements, including immigration and congestion pricing in Manhattan. The Trump administration has a history of opposing large-scale transit projects in Democratic states, including previous attempts to block funding for the Hudson River tunnel during Trump’s first term.

As the legal battle unfolds, the future of the largest U.S. infrastructure project and a vital Northeast rail corridor remains uncertain.