White House orders pause on federal grants, loans starting this week
WASHINGTON, Jan. 28 — The White House has ordered a temporary pause on federal grants and loans starting Tuesday, raising concerns over its potential impact on South Korean businesses waiting to receive grants pledged by the previous 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. This decision comes as the administration assesses whether existing grants and loans align with its policy priorities.
The pause will affect financial assistance for various sectors including foreign aid, nongovernmental organizations, and climate initiatives. Additionally, programs focused on “diversity, equity, and inclusion” will also be halted, a move previously criticized by former President Donald Trump, who issued an executive order to end such programs.
This decision has sparked questions regarding its ramifications for South Korean businesses, such as Samsung Electronics Co. and SK hynix, which are expecting to receive direct funding related to their investments in the United States under agreements with the previous administration.
Furthermore, the memo indicates that the suspension of grants and loans will be carried out “to the extent permissible by law.” Some observers speculate that legally binding contracts with Korean businesses could potentially remain unaffected by this new policy.
This situation continues to evolve, and stakeholders from various sectors are closely monitoring developments as the implications of this pause are further assessed.
