Trump pulls $4 billion in federal funding for a project that could've reshaped California's transport system.
The Trump administration has been busy reshaping federal spending priorities.
Recently, the POTUS announced a massive $90 billion investment to turn Penslyvannia into an AI hub which caused the AI chip stock market to surge.
Meanwhile, federal agencies have been redirected toward enforcement priorities, with a 'promoted' ICE app targeting undocumented immigrants and sometimes even legal residents across the country. At the same time, funding for various state-led infrastructure projects has come under scrutiny.
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In other areas, the president is pulling federal funding from a critical transport system.
California's ambitious high-speed rail project just became the latest casualty of these shifting priorities.
On Wednesday (16 July), the Trump administration pulled $4 billion in federal funding from California's bullet train that was set to shuttle riders between San Francisco and Los Angeles.
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Both Trump and Transportation Secretary Sean Duffy slammed the project as a 'train to nowhere,' throwing the state's long-delayed bullet train plans into serious doubt.
Federal money only accounts for less than a quarter of the project's total funding, the rest comes from state sources, including voter-approved bonds and California's cap-and-trade program.
“The Railroad we were promised still does not exist, and never will," Trump wrote on Truth Social. "This project was Severely Overpriced, Overregulated, and NEVER DELIVERED.”
This is just the latest clash between Trump and California. His administration has already blocked the state's rule to phase out gas-powered car sales, launched investigations into university admission policies, and threatened funding cuts over transgender athletes in girls' sports.
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Voters first approved the high-speed rail project back in 2008, and it was supposed to be running in this decade. Instead, cost estimates have kept growing and deadlines keep getting pushed back, leading rail project leaders to seek private investment of $100 billion.
State officials are now focused on building a 119-mile (192-kilometre) stretch connecting Bakersfield and Merced in the Central Valley. That section is supposed to be operational by 2033.
The California High Speed Rail Authority is expected to release an updated funding plan and timeline for lawmakers this summer.
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“Canceling these grants without cause isn’t just wrong — it’s illegal,” said authority CEO Ian Choudri. “These are legally binding agreements, and the Authority has met every obligation, as confirmed by repeated federal reviews, as recently as February 2025."
The authority has asked potential private investors to express interest by the end of the month.
Democratic Gov. Gavin Newsom said the state will keep 'all options on the table' to fight the revocation of federal funds.
“Trump wants to hand China the future and abandon the Central Valley. We won’t let him," he said.
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California's main funding source for the project is its cap-and-trade program, which is set to expire at the end of 2030. Newsom wants to extend it through 2045.