Understanding Trump policies facing tribal entities

President Trump has signed dozens of executive orders since taking office last week. The potential impacts for tribal nations, entities and industries range from citizenship status to tax liability to federal-level visibility, which itself can have implications for official tribal recognition. Here, we explore the potential impacts and outcomes of these early statements from the incoming administration.

Tax status

Two proposed rules clarifying the income-tax treatment of tribal entities and industries may be among tribal communities’ top concerns relating to the change in administration. 

Tax status of tribal corporations: In October 2024, the Treasury and IRS announced a rule change to clarify that tribally chartered corporations are not subject to federal income tax and remain eligible for clean energy tax credits through the Inflation Reduction Act regardless of their tax liability.

Clarification of the 2014 Tribal General Welfare Exclusion Act: The original law defined “general welfare benefits” paid from a tribal entity to its members as being tax-exempt, as long as four key criteria were met:

1. Benefits must be available to any tribal member meeting the guideline
2. Offered for the promotion of general welfare
3. Not be lavish or extravagant
4. Not be compensation for services

The amendment currently under consideration proposes to allow individual tribes to further define and clarify those criteria within their unique cultures and circumstances.

Both proposed rules have gone through the public comment and review processes but have not yet been enacted.

It remains to be seen whether the new administration will allow the rules to go into effect or challenge them.

The Trump administration opposes programs it sees as giving preferential treatment based on race or ethnicity, and in that vein, it may well reject these efforts to grant favorable tax status to native entities.

On the other hand, the fact that Trump is supportive of states’ rights and local sovereignty on other issues (such as school choice), and the fact that he has advocated for the official recognition of the Lumbee Tribe in North Carolina, suggest that his administration may be supportive.

Energy issues

Several of Trump’s early executive orders relate to energy policy. 

• In his executive order “Declaring a National Energy Emergency,” Trump directs agencies to identify and exercise any lawful emergency authorities available to them to facilitate the identification, leasing, siting, production, transportation, refining and generation of domestic energy resources, including, but not limited to, on federal lands. 

Some may question whether tribal lands could be considered federal lands for this purpose, but that interpretation is unlikely, since tribal sovereignty sets these lands apart from other federal properties, such as national parks, forests, preserves or military bases. Under that interpretation, this order has no impact on tribal entities.

• In his executive order “Unleashing American Energy,” Trump moved to “encourage energy exploration and production on federal lands and waters,” which could lead to the development of tribal businesses relating to oil, natural gas and mineral extraction. Another executive order, “Unleashing Alaska’s Extraordinary Resource Potential,” more specifically reopens Alaskan lands to drilling. 

While tribal groups have been supportive of opening Alaska to drilling operations to spur economic growth, actual investment interest appears to be low.

Energy companies have been quoted in the media saying they are unlikely to begin drilling operations in Alaska, since future administrations could reverse policy course and U.S. oil production is already at high levels in more accessible regions.

After a law passed during the first Trump administration allowed oil and gas lease sales in the Arctic National Wildlife Refuge, the Department of the Interior received no bids when it offered 400,000 acres of the refuge for drilling last year.

• The administration’s temporary withdrawal from wind energy leasing off America’s Outer Continental Shelf could potentially impact native-owned energy companies that were interested in pursuing renewable energy projects. This action has halted new offshore wind energy leasing and directed a review of existing leases.

It does not appear that any current leases are held by tribal entities, so potential impacts appear minimal.  

Federal funding freeze

A key early action by the Trump administration was an executive order temporarily freezing certain federal grants and loans. This move has created uncertainty for tribal programs that rely on federal funding for healthcare, education, housing, and infrastructure development.

The freeze applies to new discretionary grant programs and loan disbursements administered by federal agencies, pending a review to ensure alignment with the administration’s policy priorities. While the executive order does not directly target tribal nations, it could delay or disrupt funding streams for initiatives critical to tribal communities. Programs at risk include:

• Bureau of Indian Affairs (BIA) grants: Education and economic development programs may experience delays.
• Indian Housing Block Grants (IHBG): These grants support affordable housing development and rehabilitation in tribal communities.
• Indian Health Service (IHS) facilities funding: Certain infrastructure and improvement projects could be postponed due to the freeze.

The freeze has already faced legal challenges, with advocacy groups arguing that it disproportionately impacts Indigenous communities and violates funding agreements already approved by Congress. A federal judge has issued a temporary injunction preventing some funding cuts from taking effect, but the long-term implications remain unclear.

In addition, there is confusion after the Trump administration rescinded the memo announcing the freeze, yet said the freeze will continue.

If the freeze continues or expands, tribal governments and enterprises may need to explore alternative funding sources or contingency plans to sustain essential services. The administration has stated that funding reviews are intended to promote efficiency and ensure taxpayer dollars are spent effectively, but tribal leaders remain concerned about the potential impact on critical programs. Although federal funds appear to be safe at the moment, tribes are bracing for possible cuts and are fighting to protect treaty rights.

DEI reversals

Trump’s executive orders reversing diversity, equity and inclusion (DEI) initiatives — particularly “Ending Discrimination and Restoring Merit-Based Opportunity” — could affect individual members of tribal groups as they apply for employment, as well as tribal businesses that seek federal contracting opportunities. 

The potential economic effects of this order on tribal corporations engaged in government contracting could be significant. According to analysis by Tribal Business News and HigherGov, firms owned by tribal nations, Alaska Native corporations and Native Hawaiian organizations won a record $23.3 billion in federal contracts in 2023, marking the eighth consecutive year of growth. These increases were fueled by federal spending increases and a recognition on the part of tribal leaders that government contracting could diversify revenue streams. 

However, the fact that tribal entities will no longer qualify for preferential treatment does not necessarily mean that they will lose existing government contracts or be unable to win additional ones, so the actual impact remains to be seen. 

Trump also rescinded several executive orders from the prior administration relating to strengthening marginalized communities, including tribal nations. Those with potential impacts on tribal nations and communities include: 

• EO #14031, Advancing Equity, Justice, and Opportunity for Asian Americans, Native Hawaiians, and Pacific Islanders (issued May 28, 2021)

This order created a presidential advisory commission within HHS to raise the visibility of issues important to native communities, and an initiative to coordinate federal efforts to advance opportunity for Asian American and Native Hawaiian/Pacific Islander communities. This included directives to report and respond to anti-Asian hate crimes, enhance equity in federal funding and employment opportunities, and enhance language access services for federal programs. 

This initiative improved visibility for members of these groups, which led to increased representation in senior government leadership positions. Many also point to improved tracking of anti-Asian hate crimes and increased investments in health equity initiatives and economic development efforts intended for tribal communities. More tangible outcomes are less clear, but it’s possible that tribal groups’ visibility in government could take a step backward with the rollback of this initiative. 

• EO #14049, White House Initiative on Advancing Educational Equity, Excellence, and Economic Opportunity for Native Americans and Strengthening Tribal Colleges and Universities (issued October 11, 2021)

This order issued an inter-agency directive to study the causes of educational challenges faced by native students. It also established initiatives to increase native students’ enrollment in early education programs, expand technical education and job training programs for native students, and enhance the ability of tribal colleges and universities to access federal funding and partnerships. 

The initiative’s impact to date on educational attainment among tribal students has been limited and inconsistent. While high school graduation rates among native students increased nationally from 65% in 2010-11 to 69.7% in 2012-13, it’s unclear how much of this increase can be attributed to the initiative, and not all tribal groups saw similar results. Without conclusive evidence that the original initiative was successful, it’s unclear whether its discontinuation will have a meaningful impact.

Birthright citizenship

Tribal leaders have raised concerns about the executive order “Protecting the Meaning and Value of American Citizenship,” which seeks to clarify that the privilege of birthright citizenship granted under the 14^th Amendment has always excluded “people born in the U.S. and not subject to the jurisdiction thereof.” It could be inferred that members of tribal communities who were born on sovereign tribal lands are not subject to U.S. jurisdiction. 

However, the executive order goes on to specify that “among the categories of individuals born in the U.S. and not subject to the jurisdiction thereof” are (a) a baby born to a mother who was unlawfully present in the U.S. at the time of birth, or (b) a baby born to a mother whose presence in the U.S. was lawful but temporary, and (in both cases) whose father was not a U.S. citizen. Neither definition would include individuals born on tribal lands unless other conditions also applied, so one can infer that the policy’s intent was not directed at tribal groups.

The interpretation of the order, as well as its legality, remains unclear; this executive order has been blocked by a federal judge for being unconstitutional.

• Trump’s Department of Justice attorneys have questioned whether Native Americans could be considered non-U.S. citizens according to a 19th century law that excludes indigenous peoples from birthright citizenship. 
• An Arizona state senator said she and other members of the Navajo Nation were questioned by ICE despite showing a Certificate of Indian Blood, claiming that ICE agents failed to recognize it as valid proof of citizenship.

Tribal recognition

Trump has actively supported federal recognition of the Lumbee Tribe of North Carolina. On Thursday, January 25, 2025, Trump signed a memorandum directing the Department of the Interior to initiate formal recognition of the Lumbee Tribe as Native American. The memorandum instructs the Secretary of the Interior to submit a plan within 90 days that explores potential legal pathways for the tribe to obtain full federal recognition — an outcome that ultimately requires Congressional approval.

If enacted, this would provide federal benefits to the Lumbee Tribe, which has long sought recognition. As far as wider-ranging impacts, there is no evidence suggesting Trump is considering granting recognition to other tribal groups, though legally and procedurally, this action could set a precedent for further protective action or recognition.

How Wipfli can help

Our tribal industry professionals can help you stay up to date on administration policies impacting tribal entities and governments. Learn more about our services for tribal gaming and government entities, and for continuous updates on administration policies impacting the tax and energy sector, follow our policy updates page.