The recent $1 trillion bipartisan infrastructure package was excellent news for the metals industry. The most recent update on this package brings even better tidings. There is now a requirement that projects be made with U.S. steel.
The Requirement That Projects Be Made with U.S. Steel
The Biden administration already encouraged local manufacturing and construction businesses with its infrastructure package. The most recent announcement is particularly good news for those in the metals industry.
The latest guidance says that the materials bought for the infrastructure products must be from U.S. manufacturers. This applies to all relevant projects, from broadband internet to water pipes and from highways to bridges.
The requirement that projects be made with U.S. steel is designed to continue supporting the local economy. It should help with the economic rebound. The guidance specifically mentions iron and steel.
Exceptions if There Is a Lack of Material
While the guidance requires infrastructure projects to use American materials, there is an important caveat. There is a waiver process available if:
- The material costs are too high (if the project’s cost would increase by over 25%).
- There isn’t enough domestic production or supply.
- The domestic production isn’t of a satisfactory quality.
- It isn’t in the public’s interest to get the materials domestically.
Waivers Will Decrease Over Time
This waiver process should not be disheartening for American metals companies. It is partly there to reduce stress on their company. Additionally, the plan is to reduce the number of waivers over time as the country’s manufacturing abilities increase.
The Requirement Applies to All Manufacturing Processes
Importantly, the new guidance explicitly applies to all manufacturing processes. These include the application of coatings as well as the initial melting stage.
Additionally, the majority of manufactured products used in these infrastructure construction projects must be made in the United States.
This Will Help the Manufacturing Sector
One of the primary goals of this new guidance is to help the manufacturing sector. Companies and workers in the metals industry will both benefit. Companies will find more project opportunities. This will increase the demand for workers, providing more good jobs.
The overall goals of this requirement for American steel include:
- Create more jobs in the metals industry
- Reduce the strain on supply chains
- Reduce reliance on other countries, including China
Conclusion
The Biden administration recently announced that projects completed under the new infrastructure bill must use American products. This will increase the demand for U.S. steel and iron.
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