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The past few years have marked a renewed focus on the manufacturing industry. During the COVID-19 pandemic the United States’ reliance on external trade partners and the stress on our system was evident. In her , former U.S. trade negotiator, discusses the realignment that the U.S. has had around trade policy. There is a new understanding that while the United States needs access to export markets, a renewed focus on manufacturing and the industrial space is critical. This has driven a slew of policy changes and initiatives that would not have been likely ten to fifteen years ago. These policy changes are giving industrials national strategic importance and providing a platform for the industry to assert its preeminence. ��

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Even though the industrial sector has had an overall consistent economic performance through uncertain financial periods – and these new government and private investments are long overdue for the sector – it's important to bear in mind the impact that these policies might have on trade and learn how companies can proactively prepare themselves for these changes. Companies in this sector must navigate potential consequences of these policies by managing their .

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Recently, four bills that focus specifically on shoring up the industrial sector passed the United States Congress – in 2021, US Innovation and Competition Act and the Infrastructure Investment and Jobs Act (IIJA) and in 2022 the CHIPS Act and Facilitating American-Built Semiconductors Act (FABS Act) passed and were signed into law. ��

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US Innovation and Competition Act (2021)

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The US Innovation and Competition Act, Bill S.1260, was passed by Senators Chuck Schumer (D-NY) and Todd Young (R-IN) in June 2021. was created “to establish a new Directorate for Technology and Innovation in the National Science Foundation, establish a regional technology hub program, to require a strategy and report on economic security, science, research, innovation, manufacturing, and job creation, to establish a critical supply chain resiliency program, and for other purposes.” The 250-billion-dollar bill allocates $52.7 billion of funding for domestic semiconductor manufacturing and R&D. $1.5 billion dollars is apportioned for advanced communications R&D, the sector that brought us radio, closed captioning, and antenna testing. This bill also created a Directorate for Technology and Innovation in the National Science Foundation that provides “technology focus areas.” It prescribes that congress create a directorate over the next five years to allocate $29 billion between technology development centers, “innovation institutes,” lab-to-market initiatives, EPSCoR program, and testbeds. This bill recommends that Congress provide $17 billion to the Department of Energy and 17.5 billion to DARPA. Lastly, this bill created a and allocated a budget of $9.4 billion over these five years, to nurture these new “technology hubs” in U.S. states and cities that are not yet leading in innovation.

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The New York Times describes the bill as “the most expansive industrial policy legislation in U.S. history,” The US Innovation and Competition Act is designed to give the United States a chance to reclaim some ground in global innovation and demonstrates a revival of government-led industrial policy. ��

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Infrastructure Investment and Jobs Act (IIJA) (2021)

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The Infrastructure Investment and Jobs Act, commonly known as the Bipartisan Infrastructure Law, passed in November 2021. It is a mass effort to reinvest in US infrastructure and technology. For example, $110 billion of this is roads, bridges, and major transportation construction projects while $11 billion is for transportation safety programs. The bill covers a variety of other transportation initiatives including $39 billion to modernize transit and improve accessibility; $66 billion for passenger and freight rail; $7.5 billion to build a national network of electric vehicle chargers; $73 billion to overhaul the nation's power infrastructure, clean energy transmission, and overall energy policy; $65 billion for broadband development. ��

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The bipartisan infrastructure law has redirected focus to areas that have historically not received as much focus and the impact areas are diverse. For example, in addition to direct project funding IIJA has invested specifically in climate sustainability areas – including over ten billion dollars for Regional Clean Direct Air Capture Hubs and Regional Clean Hydrogen Hubs. The bill has driven intense funding and focus to these industries and created opportunities for a variety of industrial companies to invest and make an impact. ��

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The almost 350 programs are included in the bill broadly divided into – Transporation, Climate, Energy and the Environment, Broadband, and Other Programs. This IIJA hit its two-year mark in November while more than 40,0000 projects are set to continue impacting local and national industrial sectors by improving transportation infrastructure and

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CHIPS Act (2022) FABS Act (2021)

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In August 2022 Congress passed which is focused primarily on the semiconductor industry in the United States. It allocates money to support domestic production of semiconductors, research and manufacturing of semiconductors, and workforce training to strengthen the US supply chain and reduce reliance on foreign trade. While the CHIPS Act focuses on creating grand-based subsidies for semiconductor research and manufacturing efforts in the US, the FABS Act (S. 2107) offers tax credits to incentives the construction and overall improvement of semiconductor plants and equipment. ��Private firms can obtain the 25% tax credit during their projects directly. ��

The CHIPS Act has led to at least 30 projects, tens of thousands of jobs, and private investments exceeding billions, implementation has faced some challenges through grant delays and a shortage of skilled workers.

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Bottom Line

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Though the last few years of legislature have demonstrated a new era of industrial policy, don’t let the fleeting recognition fool you. There are still years of investment and attention needed around education, technological updates, and innovation, along with access to support around the uncertainty of navigating the trade markets and finances,14 15 for the 91������ to flourish further. Recent policy intervention is intended to , but we still do not know what the t of these policy changes will be. The policies may incentivize firms to move in a different direction than the free market might have suggested. Regardless, these last four years of US policy mark a promising first step for the industrial sector. ��

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_{With editing by Sanjana Singh}