What the State of the Union Address Means for Manufacturers

On Tuesday, February 7, President Biden gave the annual State of the Union address, providing a reflection on the past year and an overview of potential policy changes. The President discussed key domestic challenges including the nation’s progress against the COVID-19 pandemic, the economy, healthcare and research, and taxes on large corporations. Unlike in 2022, when the President encouraged Congress to pass the CHIPS and Science Act during his annual address, this year’s address did not heavily discuss impacts on manufacturers. However, the President did talk about some policies that could help this sector. Highlights from his address include:

• America could lead the world in manufacturing again.
• Roughly 800,000 jobs have been created thus far. However, job creation does not stop there. The CHIPS and Science Act will create hundreds of thousands of additional new jobs across the country, such as for Intel, a manufacturer of semiconductors (or computer chips) which is building a factory in Columbus, Ohio. Although not specifically mentioned in the address, it is anticipated that additional jobs will be created by companies supplying or otherwise working with Intel and that other semiconductor manufacturers could also consider establishing themselves in the area. The increased demand for labor could affect other manufacturers by creating a labor shortage in these areas.
• Further, the Act positions the country to regain semiconductor or computer chip market share, the loss of which caused supply chain disruption and cost increases to American companies that relied on overseas suppliers to fulfill these needs.
• The Administration is working to improve veterans’ reintegration, including supporting job training and job placement. This may provide opportunities for manufacturers to identify and hire new employees with specific skills.

Despite little attention to manufacturing companies, legislation, the economy, or other external factors still may affect these businesses. For instance, bi-partisan support to change research and development expense amortization rules or other tax law changes could result in changes that manufacturers must understand and follow. To discuss how government policies may affect your manufacturing business, please contact a member of HBK Manufacturing Solutions at 330-758-8613 or manufacturing@hbkcpa.com.