On the second anniversary of U.S. President Joe Biden signing the Inflation Reduction Act and the CHIPS and Science Act, these policies aimed at revitalizing U.S. manufacturing face severe challenges. A recent investigation by the Financial Times reveals that the implementation of these acts has not progressed as expected, with many planned large-scale projects experiencing delays or even stagnation. Data shows that nearly 40% of announced projects worth over $100 million are behind schedule or paused, dealing a blow to the ambitious reshoring U.S. manufacturing plan.

The Inflation Reduction Act and the CHIPS and Science Act, two landmark pieces of legislation, aim to stimulate domestic clean energy technology and semiconductor industries through over $400 billion in tax credits, loans, and subsidies. These policies reflect the Biden administrations determination to revitalize U.S. manufacturing and reclaim leadership in the context of global supply chain restructuring. However, despite substantial financial support, their implementation faces numerous challenges.

According to reports, there are 114 projects related to these acts, each worth over $100 million, with a total investment of $227.9 billion. However, approximately $84 billion worth of projects are delayed, with postponements ranging from months to years, and some even indefinitely shelved. These delays not only slow the revival of U.S. manufacturing but also expose the complexities of policy implementation.

In specific cases, several large-scale projects have publicly announced delays. For example, Italian energy company ENELs planned $1 billion solar panel factory in Oklahoma, LG Energy Solutions $2.3 billion battery storage facility in Arizona, and Albemarles $1.3 billion lithium processing plant in South Carolina have all been postponed or paused due to worsening market conditions, slowing demand, and policy uncertainties. These cases show that despite government incentives, market and policy complexities still affect corporate investment decisions.solarAdditionally, some project delays remain undisclosed. For instance, semiconductor manufacturer Pallidus planned to relocate its headquarters from New York to South Carolina and invest $443 million in a new factory, but construction has stalled. Similarly, U.S. semiconductor packaging and testing company Integra announced an $1.8 billion semiconductor plant in Bel Aire, Kansas, last year, but the project has not progressed due to uncertainty over government funding.

The reasons for these delays are multifaceted. First, changing market conditions directly impact corporate investments. Since the pandemic, global economic uncertainty and fluctuating demand, especially in high-tech sectors like clean energy and semiconductors, have made companies cautious about large-scale investments. Second, with the 2024 U.S. presidential election approaching, policy uncertainty has heightened corporate hesitation. Election years often bring policy adjustments, making companies more cautious about long-term projects requiring significant upfront investment.

For the Biden administration, this situation poses a major challenge. Manufacturing reshoring is a key part of its economic policy, aimed at reducing reliance on foreign supply chains and creating domestic jobs. However, the current reality highlights the complexities and difficulties of implementation. Addressing these challenges and ensuring projects proceed as planned will be critical for the administration in the coming months.

Overall, the U.S. manufacturing reshoring plan has encountered unexpected challenges. Despite the Inflation Reduction Act and the CHIPS and Science Act providing massive financial support, market conditions, demand shifts, and policy uncertainties have negatively impacted project progress. For the U.S. government, finding solutions amid these challenges and ensuring the effectiveness of reshoring will directly affect the future competitiveness and direction of the U.S. economy.

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