“These funding cuts are already hitting home, with our members and local communities facing immediate risks,” said SMART General President Michael Coleman.

In Michigan, the collapse of Sandisk’s $3 billion Mundy Township semiconductor plant is the latest sign that federal economic policy is sending shockwaves through advanced manufacturing. State and local officials blame new tariffs and the uncertainty created by the tax bill for scaring off investors and derailing generational opportunities.

Even administration-endorsed, marquee private ventures are feeling the weight of policy and market volatility. The Stargate project – a $500 billion AI infrastructure initiative announced by SoftBank and OpenAI in partnership with major U.S. tech companies – has faced delays and a downward revision of its ambitions. While initial plans called for rapid, nationwide data center construction, the current focus has shifted to developing a smaller facility in Ohio by year’s end. Secretary of Commerce Howard Lutnick attributed this wave of AI investment to the administration’s tariffs, stating that “firms are looking to the U.S. as a stable, secure location for critical infrastructure.”

SoftBank and OpenAI’s leadership have maintained a positive outlook, citing a trade agreement with Japan that is expected to bring additional capital and technology partnerships into the U.S. “We are moving at hyperscale and speed to deliver the AI infrastructure that will power the future and serve humanity,” the companies said in a joint statement.

These setbacks come as demand for low-leakage ductwork and insulated metal panels – signature products of the American sheet metal industry – have reached historic highs, driven by the surge in EV, semiconductor, and clean tech megaprojects.

Ohio Steel: A Hydrogen Dream Deferred

The pain isn’t limited to clean tech and semiconductors. In June 2025, Cleveland-Cliffs, a leading steel manufacturer, abruptly cancelled a $500 million project in Middletown, Ohio, dealing another blow to union sheet metal workers. “This would have been a solid project for Local 24, especially our Dayton-area membership,” said Local 24 Business Manager Jeff Hunley.

The planned switch from a coal-based steel plant to hydrogen was expected to create 1,200 union construction jobs and protect 2,500 existing positions. The project, which would have replaced a coal-fired furnace with a hydrogen-powered system, was partially funded by a $500 million Department of Energy grant from the Inflation Reduction Act.

But as Steel Industry News detailed, the Trump administration’s shift away from clean energy and toward fossil fuels, alongside rising tariffs on steel imports, “forced Cleveland-Cliffs to prioritize short-term profitability.” The result: at least for now, the project has been abandoned, and a new round of layoffs and lost hours has hit SMART members.

SMART General President Michael Coleman explained: “When we work to pass laws like the Inflation Reduction Act, we’re investing in our future. The grants and tax credits we got passed in that law are the kinds of policies that create jobs for sheet metal workers five, ten, fifteen years down the line. Unfortunately, when those types of policies are thrown in jeopardy, we see companies become less willing to invest, and projects get paused or cancelled.” With the cuts to clean energy tax credits and programs in the 2025 bill, Coleman warned, “we can expect more disappointing stories like this, at least for the next few years.”

Not Just One-Offs: A National Pattern Emerges

This isn’t isolated. So far in 2025, over $14 billion in clean energy megaprojects have been cancelled or delayed, with nearly half of all new clean tech factories facing the axe or significant slowdowns, per Finance & Commerce and Construction Dive. SMART locals in San Diego and Cleveland are already reporting project suspensions and layoffs as federal funds dry up, with ripple effects throughout the HVAC supply chain.

The union’s latest statements highlight just how directly federal decisions are impacting members on the ground. Following a June decision by the Department of Energy to pull back on project labor agreements for major energy projects, SMART General President Michael Coleman was blunt: “These major energy projects were creating jobs for SMART members and American construction workers. Now, after the Department of Energy’s announcement, those jobs have been taken away. That’s bad for our members, our families and our country. We’re urging the Department of Energy to reverse this decision and put American workers back on the job.”

The guidance from the White House budget office, issued on June 12, 2025, encourages – but does not require – the use of project labor agreements (PLAs) on federal construction jobs over $35 million, and includes broad exceptions. As a result, the pipeline of megaproject work for union sheet metal workers has become increasingly unstable, with uncertainty around which projects will actually proceed with labor protections and federal support.

Sheet metal contractors, represented nationally by The Sheet Metal and Air Conditioning Contractors' National Association (SMACNA), have called for urgent regulatory clarity and a return to predictable federal funding, warning that “inventory levels are trending lower as we head into 2025” and that the uncertainty “makes it increasingly difficult to plan for workforce needs or invest in capacity."

The EV Sector: A Cautionary Tale

As previously reported in SNIPS NEWS, the electric vehicle industry is at a crossroads. The Trump executive order unwinding federal EV mandates and freezing Department of Energy loan guarantees has put hundreds of billions in manufacturing on ice. The ripple effects are immediate: Rivian has paused expansion at its Georgia facility, and conditional loans for battery plants in Indiana and clean-tech suppliers across the Midwest are under review.

Investor confidence has also taken a hit. Guggenheim analyst Ronald Jewsikow recently downgraded Rivian stock, citing both company-specific and policy-related headwinds to a thesis where the R1 model could coast them to higher margin success with future R2/R3 releases. “Continued R1 softness and the [‘One Big, Beautiful Bill’] introduce fundamental and narrative risks to our long-term R2/R3 bull thesis that cannot be ignored,” Jewsikow wrote in a report obtained by Barron’s. This underscores how legislative changes are now weighing on both project pipelines and financial markets across the EV sector.

Sheet metal and HVAC contractors, who’ve been scrambling to meet surging demand for new ductwork and process air solutions in these plants, now face a landscape of more uncertainty.

Industry leaders are urging Congress to restore key tax credits and stabilize policy before more megaprojects are mothballed. With more than $9 billion in investments and almost 10,000 jobs already cancelled, delayed, or shuttered in Republican districts alone, according to E2, the stakes are rising.