White House orders pause on federal grants, loans starting this week

The White House in Washington, D.C., is seen, Jan. 20. AP-Yonhap

The White House has ordered a temporary pause on federal grants and loans starting Tuesday (local time), according to reports, raising concerns over its potential impact on Korean businesses waiting to receive grants pledged by the preceding Biden administration.

On Monday, Matthew Vaeth, the acting head of the Office of Management and Budget, issued a memo on the freeze that takes effect at 5 p.m., The New York Times and Reuters reported. It comes as the Trump administration is looking into whether grants and loans are aligned with the president’s policy priorities.

The pause affects financial assistance for foreign aid, nongovernmental organizations and climate initiatives as well as “diversity, equity and inclusion” programs, which President Donald Trump cast as a discriminatory policy and ordered to end under an executive order.

The memo raised questions over whether it would affect Korean businesses, including Samsung Electronics and SK hynix, which are supposed to receive direct funding for their investment in the United States in accordance with their contract with the previous U.S. government.

Given that the memo shows the withdrawal of grants and loans will be carried out “to the extent permissible by law,” some observers raised the possibility that legally legitimate contracts with Korean businesses might remain unaffected. (Yonhap)