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Modernizing U.S. Infrastructure Means Leveraging the Global Supply Chain

In President Biden’s first State of the Union address, the sense of optimism surrounding the landmark U.S. infrastructure law was palpable. The law promises to address long-term critical infrastructure needs like new highways and bridges, safe and reliable public transportation, clean water, and internet access. The major investments and thousands of projects already announced will benefit communities across the United States, and many aim to support America’s most vulnerable populations.

Modernizing America’s infrastructure is critical for U.S. economic growth and competitiveness, and President Biden has directed his administration to begin these projects as soon as possible. Unfortunately, provisions in the law itself require concrete, immediate action by the administration in order to achieve these important goals.

The law imposes an unprecedented expansion of domestic sourcing “Buy America” requirements on federally funded infrastructure projects, including those funded through grants to state and local governments. However, it does not include customary exemptions, included in similar laws dating back decades, that allow the use of information technologies or equipment made outside the U.S. – technologies that are instrumental to infrastructure in the 21st century. The federal government historically granted these exemptions to the Buy American Act (domestic sourcing rules that apply to the federal government’s direct purchasing) because access to cutting-edge technology is developed through and benefits from global supply chains.

The role of technology in facilitating the infrastructure projects of today is as essential as that of bricks and mortar. For example:

  • Providing reliable internet access in rural communities requires high-speed network switches and routers, and fiber optic cabling.

  • Adding buses for public transportation requires sophisticated engine control computers and sensors to ensure clean emissions, and deploying new, faster rail cars requires modern sensors and communication devices for safe operation.

  • Turning wastewater into clean, drinkable water requires an advanced, distributed, and connected network of sensors to optimize the cleaning processes.

  • Deploying electric vehicle charging infrastructure requires modern high-power semiconductors for effective high-speed charging.

Our companies are proud of the innovative and critical technologies they develop that are incorporated into infrastructure projects across the United States. The technology sector fuels the local economies of communities across the U.S., producing 28 percent of all manufacturing exports, and recent announcements underscore our industry’s ongoing commitment to make our products in the United States.

While our industry is taking steps to expand manufacturing in the U.S., the reality is many of the components, such as sensors, computers, and semiconductors, needed for the most impactful infrastructure projects are not made in the United States – let alone in sufficient quantities to meet the law’s induced demand. Government-issued waivers of domestic sourcing restrictions have been used throughout Republican and Democratic administrations alike. If the current administration follows through on itsplans to diminishthis longstanding practice, deploying critical projects funded by the new infrastructure law will be impossible.

The technology industry is a key partner to bring U.S. infrastructure into the 21st century and ensure the historic law meets its full potential. To do so, the administration must appreciate that imposing rigid domestic sourcing requirements will restrict or eliminate the ability to incorporate innovative technologies produced through resilient, secure, and truly global supply chains. Global trade is vital to U.S. economic growth, allowing U.S. companies to reach the 95% of the world’s consumers who live outside this country. To support robust infrastructure investment, exemptions for essential information technology products will enable the U.S. government to make these projects a reality and support U.S. workers and the broader U.S. economy.

Public Policy Tags: Federal Advocacy