Europe Tightens, the US Loosens, and the Inland Empire Stays a Hallway
The EU's new Industrial Accelerator Act is the next chapter in bloc-aligned manufacturing. The IE missed the last chapter, and current trends suggest it will miss this one too.
By the Editors of The Citrus Belt Review • May 28, 2026 • 9 min read
The European Union unveiled its Industrial Accelerator Act in March, and the regional press largely treated it as a Brussels story. It is not a Brussels story. It is the third move in a sequence that started with the US Inflation Reduction Act in 2022, was partly unwound by the One Big Beautiful Bill Act in July 2025, and now finds the European Union doing what Washington just stopped doing: writing industrial policy that decides who gets to compete in your market.
For the Inland Empire, the question raised by the IAA is not whether IE manufacturers will lose European customers. Most of them do not have European customers to lose. The question is what the corridor's role becomes in an economy where manufacturing is regionalizing into geopolitical blocs — and the current trajectory points to an answer IE leaders should not be comfortable with.
Start with what the IE actually exports, because the numbers are smaller than the rhetoric usually suggests.
Riverside County exported $4.8 billion in goods in 2024, ranking 36th among US metropolitan statistical areas — meaningful but not large. The most recent county-level data for San Bernardino, from 2018, put exports there at $5.9 billion. Combined IE exports are probably in the $10 to $11 billion range, against a metropolitan GDP of roughly $257 billion.
The top categories are computers and electronic products, transportation equipment, and industrial machinery. About 6,300 IE-based companies export, 89% of them small or medium-sized firms, and roughly 1,670 of them ship into the EU-28.
The IE's top export destinations are Mexico, Canada, China, Japan, and the Netherlands. The Dutch presence in the top five is the most analytically interesting fact in the export profile, because Rotterdam is the EU's logistics gateway. IE goods that go to Europe go through Rotterdam, which means the corridor's EU exposure is concentrated in exactly the channel the IAA's origin and low-carbon procurement rules would touch first.
This matters less than it appears, though, because the IE's overall economy is not export-driven. It is import-receiving. Half of California's container traffic from Asia comes through the San Pedro Bay port complex, and the corridor exists in its current form because that volume needs to be sorted, stored, and trucked east.
SCAG's most recent economic update puts logistics at one in five jobs in San Bernardino County. Durable goods manufacturing employment, meanwhile, has declined from 61,200 in 2020 to 57,900 in 2024, a slow erosion that has continued through both the IRA's boom years and the warehouse moratorium debate.
The IE's flagship heavy industrial firm, California Steel Industries in Fontana — the only major West Coast flat-rolled steel producer, with roughly 2 million tons of annual capacity, now owned jointly by Nucor and Japan's JFE Steel — serves customers in the 11 states west of the Rockies. It does not ship to Europe. It is a regional integrator, not a transatlantic exporter, and that profile is representative of IE manufacturing as a whole.
So the direct exposure to the IAA is narrow. A subset of IE aerospace component shops in Chino and Ontario, which feed into Tier 1 suppliers for Airbus through layered subcontracting, will face traceability and origin documentation requirements that did not exist before. Specialty industrial firms that ship into European procurement-adjacent markets will need to demonstrate EU-aligned sourcing or local value-add. Some of the food and consumer products exporters — The Frozen Bean in Rancho Cucamonga ships to 40-plus countries and won a Commerce Department export award in 2024 — will navigate new compliance burdens. These are real costs for the firms involved, but they are not the regional story.
The regional story is what the IAA reveals about where the IE sits in the larger reorganization of global manufacturing, and that requires looking backward at the IRA.
The 2022 Inflation Reduction Act spent roughly $370 billion in clean-energy and manufacturing incentives, and the most-cited consequence was a wave of factory construction. The Clean Investment Monitor puts quarterly clean-manufacturing investment at $2.5 billion in late 2022, rising to $14 billion by early 2025, with more than 380 facilities announced.
That investment did not land in California. It went to Georgia for batteries, Tennessee and Kentucky for EVs, Arizona for semiconductors, Nevada for lithium processing, Texas for solar. California captured deployment — the rooftops, utility-scale solar farms, EV adoption — but very little of the production.
Within California, the IE captured almost none of either. The reasons are familiar to anyone who has tried to site industrial capacity in the corridor: energy costs roughly twice the national average, warehouse moratoria spreading from Pomona outward through 2023 and 2024, water uncertainty, indirect-source rules under SCAQMD, entitlement timelines that run years longer than competitor states. When a battery manufacturer looked at a Western US site in 2023, the comparison was rarely IE versus Arizona. It was Arizona versus Nevada versus Texas, with California already excluded from the shortlist.
The IRA was the largest US industrial policy effort in generations, and the IE was structurally excluded from its production side. That is the missed wave. What the OBBBA did in July 2025 was end the wave itself: phasing out wind component credits after 2027, accelerating residential solar credit termination, layering foreign-entity restrictions onto six previously unrestricted credits, and otherwise tightening eligibility in ways that have already slowed announcement velocity.
The clean-manufacturing surge has not reversed, but it has stopped accelerating. The US window for using federal industrial policy to attract production capacity is closing while the EU's window is opening.
The IAA's mechanism is what makes it analytically interesting and where the deeper claim sits. The IRA was a subsidy package — money on the table for firms willing to build in the US. The IAA goes further by embedding industrial policy directly into market access itself. Public procurement and state aid increasingly favor EU-origin products, local value-add, and low-carbon compliance, with streamlined permitting for designated industrial acceleration zones and tighter conditions on foreign investment in sensitive sectors.
The Arthur D. Little consultants who covered the bill in IndustryWeek framed the shift accurately: competition is moving away from lowest-cost supply chains toward what they call qualified supply chains — production networks that satisfy political, regulatory, carbon, and localization tests within a given bloc. Firms with globally distributed supply chains may need to operate parallel regional models, each aligned to its own bloc's rules.
If that is the direction, the question for any region is what role it plays in its own bloc's geometry. The Sun Belt states that captured the IRA wave have an answer: production. Georgia builds batteries. Nevada extracts lithium. Texas produces solar modules and increasingly semiconductors. Arizona does semiconductors and data centers.
These regions made themselves production candidates by combining cheap power, abundant land, light regulation, and aggressive incentive packages, and they captured a generation's worth of industrial capital in three years.
The IE made itself a distribution candidate by combining port adjacency, interstate access, and the largest contiguous industrial real estate market west of the Mississippi. Both roles are real. Both pay. But they are not the same role, and the gap between them grows in a bloc-regionalized economy because production is where employment, wage growth, technology investment, and political leverage concentrate. Distribution is where margins compress.
The bloc-regionalization thesis actually reinforces the IE's logistics dominance in the short term. Parallel regional supply chains require more total inventory, not less. If a multinational that previously ran one global supply chain now runs three — one EU-qualified, one US-qualified, one Asia-Pacific — the West Coast distribution venue handles roughly the same throughput it always did, plus the redundant inventory the new model requires.
Long Beach throughput does not decrease because European factories build for European customers; it may even increase as Chinese supply chains restructure around the EU's exclusions and seek US-side buyers. The IE warehouse market, which has spent 2024 and 2025 working through the vacancy correction from the post-COVID build cycle, ends up structurally underwritten by the same forces that worry European policymakers.
But the production gap widens. The IRA wave bypassed California, the OBBBA closes the US incentive window, and the IAA pulls the next generation of clean-tech investment toward European hubs. The IE is not on the candidate list for any of the production scenarios this implies.
The candidate list for US production in the next decade is the Sun Belt states that captured the last wave, plus whatever the federal government does with semiconductor and defense industrial-base spending under the CHIPS framework, which OBBBA actually expanded to 35% credit value.
None of that points at California. The IE's residual manufacturing — food and beverage, building products, specialty chemicals, the aerospace components cluster — is real but has been slowly declining for a decade and shows no signs of reversing.
The strategic question this raises for IE leaders is not whether to defend exports to Europe. The export volume is too small to be the right defensive battle. The question is whether the corridor's economic future is acceptably defined as logistics-and-distribution, with the production tier left to other states.
There are reasonable arguments that it is. Logistics employment supports a large workforce, the warehouse industrial real estate market is among the most valuable assets in California, and the corridor's distribution role is structurally protected by geography in a way that production capacity in Georgia or Texas is not. A region that has decided to be the West Coast's distribution venue can be that very well.
There are also reasonable arguments that the role is too narrow. Logistics is high-volume and low-margin; the IE's warehouse boom of 2018-2022 produced a lot of square footage and not much wage growth. The political coalition built around warehouse moratoria suggests that even the distribution role is contested locally.
And distribution-only economies are vulnerable to changes in upstream production geography that they cannot control — if European, American, and Chinese supply chains continue to regionalize, the volume that flows through Long Beach to IE warehouses is set by decisions made in Brussels, Atlanta, and Shenzhen, not in Riverside or San Bernardino.
The IndustryWeek piece on the IAA closed with strategic advice to multinational executives: identify exposure now, secure positions before the rules harden, accept that the operating model that dominated the post-Cold War economy may no longer fit. That advice translates locally.
The corridor's leaders — at the chambers, the economic development organizations, the cities that issue the industrial entitlements, the educational institutions that train the workforce — are operating in a moment where the production geometry of the next decade is being decided elsewhere, and the IE's seat at that table is not currently held.
Whether to contest that, and how, is the strategic question the IAA raises for the Inland Empire. The export consequences are footnotes. The structural consequences are the piece.