The U.S. Forest Service earlier this month issued the Final Record of Decision (ROD) for the Hermosa Critical Minerals Project in Southern Arizona’s Patagonia Mountains, completing the federal environmental review required for portions of the project planned on National Forest land. The decision follows several years of environmental study, public input, tribal and interagency consultation. 

Project developer South32 says Hermosa could produce up to five federally designated critical minerals, including zinc, silver, and manganese. The project includes a broader land package with potential for additional polymetallic and copper mineralization, positioning it as a significant domestic source of minerals tied to energy, manufacturing and supply-chain needs. 

The decision paves the way for South32 to fully develop the project beyond its privately held land, including building ancillary infrastructure such as a primary access road, a secondary dry-stack tailings facility, and allowing utility UniSource Energy Services to build a portion of a 138-kV power line on Coronado National Forest land.  

Construction is already halfway complete on private land. It was the first mining project accepted into the federal FAST-41 permitting program, which is reserved for nationally significant infrastructure projects meeting rigorous criteria.  

“From the beginning, we designed Hermosa to be a different kind of mine, and the federal review process helped make it even better,” South32 Hermosa President Pat Risner said. “Years of agency review, Tribal consultation and community engagement strengthened environmental protections, informed project refinements and shaped a project that can transform the local economy. We are grateful to everyone who participated throughout the process and look forward to continuing that engagement as we move from construction and development into operations.” 

The Final ROD also represents an important milestone in the broader national conversation around domestic critical mineral development and permitting reform. Hermosa’s advancement under FAST-41 did not reduce the thoroughness of environmental review or limit public input. Rather, the process helped improve interagency coordination, transparency, and accountability across federal agencies while ensuring the project moved through permitting in a timely and disciplined manner.  

Danny Seiden, president and CEO of the Arizona ˿����Ƶ of Commerce & Industry, said the Hermosa project also demonstrates the value of a predictable and transparent permitting process. 

“South32’s Hermosa project represents the kind of investment Arizona needs to strengthen domestic supply chains, support critical minerals production, and create long-term jobs in Santa Cruz County and across the state,” he said. “It’s also a model for how permitting should work. Hermosa has gone through years of environmental review, public input, and interagency consultation, and the project remains on track under the federal permitting schedule. That’s the kind of predictable, transparent process Arizona needs more of if we want to lead in industries critical to our economy and national security.” 

Over the course of the review process, Hermosa underwent extensive federal environmental analysis and consultation including more than 120 days of formal public comment periods, coordination across six federal and state agencies and consultation with 12 Tribes with historic affiliation to the region. 

“If we’re serious about bringing supply chains back to America and reducing our dependence on foreign countries, we need to responsibly produce more critical minerals here at home. This is exactly what the Hermosa project is doing,” said U.S. Senator Mark Kelly (D-Ariz.). “This milestone shows we can move projects through an efficient permitting process to create good-paying jobs while strengthening our national security.” 

South32 conducted extensive baseline environmental studies and community engagement before permit applications were formally submitted, allowing project alternatives, water management approaches, access roads and mitigation measures to be shaped by stakeholder input early in the process. 

The Final ROD confirms that environmental protections, mitigation commitments, and adaptive management measures are integrated into the approved project. Throughout the review process, South32 refined Hermosa’s design in response to agency feedback, Tribal consultation and community input, including: 

• Redesign of the dry-stack tailings facility to avoid sensitive plant species; 
• Design of a Primary Access Road, necessary for expansion, to also reduce traffic impacts to Patagonia and outdoor recreation areas; 
• Surface and ground water quality and quantity monitoring beyond state level requirements; 
• Wildlife crossings and habitat protections; 
• Cultural resource avoidance measures; and 
• Operational refinements are designed to reduce emissions, noise, and surface disturbance. 

In total, South32 committed to more than 135 conservation, mitigation and monitoring measures developed in coordination with federal agencies, Tribes and local stakeholders. Many of those commitments will become federally enforceable components of the final Mine Plan of Operations, and associated management plans outlined in the Final ROD. 

“The Final Record of Decision for Hermosa is another important milestone for Nogales. It reflects years of collaboration to ensure the Hermosa project is developed in a way that balances economic opportunity with environmental stewardship,” said Nogales Mayor Jorge Maldonado. “South32 is making a long-term investment in the people and future of Nogales through investments like its remote operating center “Centro”. Hermosa has the potential to create new opportunities to support good-paying jobs and help ensure that more of our young people can build successful careers right here at home, and we appreciate South32’s commitment to developing Hermosa responsibly while creating opportunities for local families, students and businesses.” 

With a surface footprint of 750 acres and projected to use approximately 90% less water than other mines in the region, South32 designed Hermosa to minimize its environmental impact. Once in operation, Hermosa would help transform and grow the local economy and create up to 900 good-paying jobs during peak operations, and support investment across surrounding communities for decades to come. 

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The Arizona Legislature wrapped up its 2026 session after 153 days, leaving the state’s business community with a mix of accomplishments to celebrate and concerns about Arizona’s long-term competitiveness.

Business leaders pointed to several significant victories, including expanded health coverage options for small employers, additional infrastructure funding to support economic development projects, preservation of key economic development tools, and a bipartisan budget that avoided broad-based tax increases. At the same time, they expressed concern about reductions to public university funding, the repeal of a longstanding job-creation incentive, and policy changes affecting future data center investment.

“Like most sessions in divided government, this legislative session delivered a mixed bag of results for job creators,” said Courtney Coolidge, executive vice president of the Arizona ˿����Ƶ of Commerce & Industry. “The good news is that Arizona continues to demonstrate a commitment to economic growth, competitive tax policy, and job creation. The challenge moving forward is ensuring we don’t undermine the very advantages that have made Arizona one of the most attractive places in the country to invest and grow.”

Among the business community’s top priorities this year was legislation aimed at helping small employers provide affordable health coverage to workers.

HB 2693, sponsored by Rep. David Livingston and signed into law by Gov. Katie Hobbs, creates a pathway for small businesses to join together through a statewide business organization to purchase health coverage. Supporters say the measure will allow smaller employers to increase purchasing power, reduce costs, and provide more stable benefit options.

“Small businesses often face the greatest challenges when it comes to offering competitive health benefits,” Coolidge said. “This legislation creates a voluntary, market-based option that gives employers more flexibility and employees more choices.”

Another significant victory came through the state budget, which included additional funding capacity for Arizona’s Public Infrastructure Program, a tool frequently used to support large-scale economic development projects.

The program helps communities finance roads, water systems, and other infrastructure needed to accommodate major investments. It has been utilized in projects involving companies such as TSMC, Intel, Amkor, and LG Energy Solution Arizona.

“Arizona’s economic success depends on our ability to compete for transformational projects,” Arizona Manufacturers Council Executive Director Grace Appelbe said. “Those investments don’t happen without infrastructure, and communities need tools that allow them to prepare for growth.”

The ˿����Ƶ also praised lawmakers for largely preserving the Arizona Competes Fund, one of the state’s primary economic development incentives. Early budget discussions included proposals to sweep money from the fund to help address budget shortfalls, but the final agreement maintained most of the program.

In addition, the budget included full conformity with recent federal tax changes, avoided broad-based business tax increases, and provided funding to support Arizona’s ongoing Colorado River negotiations.

Still, business leaders say several decisions made during the session could create challenges in the years ahead.

One of the biggest concerns was the repeal of the Quality Jobs Tax Credit, a program designed to encourage companies to create high-wage jobs and make major capital investments in Arizona.

The ˿����Ƶ also expressed concern over a three-year pause on issuing new sales tax exemption certificates for future data center projects. While existing projects will continue under current agreements, supporters of the incentive argue that uncertainty surrounding future projects could make Arizona less competitive in attracting additional investment.

“The state’s economic momentum didn’t happen by accident,” Coolidge said. “For years, Arizona has built a reputation for consistency and predictability. We don’t want to send a message to investors that they can’t plan for the long-term.”

Higher education funding remains another area of concern for the business community.

Arizona employers have increasingly emphasized the importance of workforce development as the state’s economy continues to expand. Business advocates warned that cuts to public universities could affect the talent pipeline needed to support growth in industries ranging from advanced manufacturing and semiconductors to healthcare and technology.

“Workforce remains one of the defining economic issues facing Arizona,” Coolidge said. “If we want to continue attracting investment and creating opportunity, we have to continue investing in the talent that makes those opportunities possible.”

Attention will now shift from the Legislature to voters, who will weigh in on several measures referred to the ballot by lawmakers, as well as potential citizen initiatives that are still gathering signatures.

For Arizona employers, the end of the legislative session marks the beginning of another important phase in shaping the state’s economic future.

“Arizona remains in a strong position,” Coolidge said. “In the months ahead, we’ll encourage voters to elect leaders who will continue making the decisions necessary to stay ahead of states that are competing for the same jobs, investments, and talent.”

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Honeywell Aerospace is preparing to launch as an independent, publicly traded aerospace and defense company headquartered in Phoenix, placing the global operation of one of the industry’s largest suppliers at the center of Arizona’s growing advanced-manufacturing economy.

The company is expected to separate from Honeywell International on June 29 and begin trading on the Nasdaq stock exchange under the ticker HONA. The planned spinoff is part of a broader restructuring of Honeywell into more focused standalone businesses.

Honeywell Aerospace marked the milestone last week with its inaugural Investor Day in Phoenix, followed by an evening reception at its Sky Harbor hangar for state and local leaders. The events offered a look at the company’s strategy as an independent business, along with aircraft, engines, and other aerospace and defense technologies bearing its newly unveiled branding.

The company reported $17.4 billion in global net sales in 2025 and is one of Arizona’s largest employers, with more than 7,000 workers in the state. Honeywell Aerospace operates across commercial aviation, business aviation, defense, and space markets.

“This is a major vote of confidence in Arizona’s economy and in the people who have spent decades building our aerospace and advanced-manufacturing base,” Arizona ˿����Ƶ of Commerce & Industry President and CEO Danny Seiden said. “The impact goes well beyond the thousands of high-paying jobs Honeywell supports today. A headquarters means the big decisions are made here, and that creates opportunities for investment, suppliers, small businesses, and communities across our state.”

Honeywell Aerospace’s portfolio includes avionics, navigation systems, sensors, aircraft engines, auxiliary power units, electric-power systems and thermal-management technologies. The company will be organized into three operating segments: Electronic Solutions, Engines & Power Systems and Control Systems.

Honeywell has deep roots in Arizona. Its aerospace operations have been based in Phoenix for decades, and the company has played a role in developing technologies used across commercial aviation, defense and space exploration.

The Phoenix headquarters designation takes on greater significance as the newly independent company lays out plans for its next phase of growth. Honeywell Aerospace told investors it expects sales to grow between 6% and 8% annually through 2030, driven by demand from commercial aviation, aftermarket services, defense and space customers. Its backlog has grown to $19 billion, up 20% from a year earlier.

CEO Jim Currier said the company plans to prioritize investments in manufacturing capacity and its supply chain as it moves forward as a standalone business.

Grace Appelbe, executive director of the Arizona Manufacturers Council, said the headquarters announcement highlights the importance of Arizona’s advanced-manufacturing sector and the skilled workforce supporting it.

“Honeywell’s presence in Arizona is a reminder that advanced manufacturing is not an abstract concept here,” Appelbe said. “It’s skilled Arizonans building technologies that power aircraft, support national defense and shape the future of flight. Anchoring that global operation in Phoenix strengthens Arizona’s broader manufacturing ecosystem and reinforces our state’s position as a hub for advanced industry.”

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A Maricopa County Superior Court judge has upheld the constitutionality of an Arizona law designed to help mid-sized cities attract large international headquarters projects, delivering a win for state business groups and economic development advocates.

Senate Bill 1543 was passed in 2025 amid debate surrounding Axon Enterprise’s proposed headquarters expansion in Scottsdale, which included plans for housing, hotels, restaurants, and other commercial development surrounding the company’s corporate campus.

Supporters argued the measure would help Arizona compete for major corporate and international headquarters investments by giving qualifying cities additional flexibility for large mixed-use campus developments. Critics, meanwhile, argued the bill amounted to unconstitutional “special legislation” tailored specifically for Axon’s project.

A lawsuit was brought by Scottsdale-based TAAAZE, a political action committee that argued the law improperly carved out special treatment for certain developments and effectively bypassed local referendum efforts.

In a ruling issued late last week, Judge Michael Herrod rejected those claims, finding that the measure serves a broader statewide economic development purpose by helping attract major international headquarters investments to Arizona.

“The statewide problem addressed by A.R.S. § 9-461.19 is attracting international headquarters,” the ruling states. “The legislature has made a determination that to address this problem, cities of middle-sized populations are likely candidates to attract such headquarters.” 

The court further concluded that because the statute could apply to other qualifying cities and projects in the future, it is not a special law.

The Arizona ˿����Ƶ of Commerce & Industry, which filed an amicus brief in the case, said the decision reinforces the state’s ability to compete for major employers and long-term investment.

“This ruling is about much more than a single project,” said Danny Seiden, president and CEO of the Arizona ˿����Ƶ of Commerce & Industry. “Arizona’s economic growth depends on our ability to compete for major employers, attract high-wage jobs, and create an environment where companies can invest with confidence. The court recognized that the Legislature has the authority to pursue policies that support statewide economic development and long-term competitiveness.”

Mike Bailey, the ˿����Ƶ’s general counsel and director of legal reform programs, said the ruling should result in additional clarity around the Legislature’s role in zoning and economic development policy.

“The court affirmed an important legal principle here: zoning authority ultimately flows from the state, and the Legislature has broad discretion to address matters of statewide concern,” Bailey said. “The decision also reinforces that laws aimed at encouraging economic development are not unconstitutional simply because they may initially apply to a limited number of jurisdictions or projects.”

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The Industrial Commission of Arizona voted last week to adopt strengthened workplace heat safety guidelines for employers statewide, delivering an outcome the business community called a practical, Arizona-driven solution to a genuine challenge.

The commission’s action follows nearly a year of work by the Governor’s Workplace Heat Safety Task Force, which brought together business, labor, and occupational safety experts to develop guidance grounded in real-world conditions. The Arizona ˿����Ƶ of Commerce & Industry and the Arizona Manufacturers Council participated throughout that process, with Grace Appelbe representing both organizations.

Appearing before the commission, Appelbe urged members to support the task force recommendations, describing them as the product of genuine collaboration and the right fit for the state’s diverse economic landscape.

“The recommendations before you reflect a thoughtful, Arizona-specific approach grounded in real-world experience,” Appelbe told the commission. “They focus on practical measures — water, shade, rest, acclimatization, and training — while preserving the flexibility needed across different industries and job sites.”

The guidelines adopted by the commission build on the Arizona Division of Occupational Safety and Health’s existing Heat Stress State Emphasis Program, launched in 2023. In the months ahead, the commission will expand employer training on heat risks, encourage the development of workplace heat safety plans, and collect data on the effectiveness of heat safety interventions across the state. Commissioners plan to revisit the recommendations in December.

For Arizona’s business community, the outcome reflects a broader principle that worker safety and economic sustainability are not in conflict — but that the path to both runs through collaboration rather than mandate.

“That balance is critical,” Appelbe said in her testimony. “In other states, more rigid, one-size-fits-all mandates have created compliance challenges without necessarily improving outcomes. Arizona has taken a better approach — one that prioritizes safety while recognizing operational realities.”

The commission’s chairman described the vote as a beginning rather than an endpoint, noting that guidelines carry the advantage of taking effect immediately, allowing employers to act now while the state continues gathering data to inform any future rulemaking.

Appelbe told the commission that the Arizona ˿����Ƶ and Manufacturers Council are prepared to be active partners in what comes next. “We stand ready to work with the Commission and its staff on the distribution and implementation of these employer guidelines to ensure Arizona’s workers are informed and protected,” she said.

The Arizona ˿����Ƶ and Manufacturers Council have been engaged in the heat safety conversation since the task force was convened by executive order in 2025. Appelbe said the business community’s consistent goal throughout has been to ensure that any guidance coming out of the process works in actual workplaces — across manufacturing floors, construction sites, agricultural operations, and the full range of industries that make up Arizona’s economy.

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The U.S. Environmental Protection Agency this week finalized a ruling that shields the Phoenix-Mesa region from a more stringent federal air quality classification, delivering a significant win for Arizona businesses and capping a years-long effort to address a problem the state has long argued it didn’t cause.

The EPA determined that the Phoenix-Mesa area would have met federal ozone standards by its August 2024 deadline but for pollution coming in from outside the United States. Under a provision of the Clean Air Act known as Section 179B, the agency will not reclassify the region from “Moderate” to “Serious” nonattainment.

The distinction matters. A reclassification to “Serious” would have significantly tightened the regulatory screws on businesses — lowering thresholds for major emission sources, increasing offset requirements, and expanding air quality control obligations — all while adding complexity to permitting.

The case for the exemption rested on a straightforward argument backed by years of modeling: Phoenix’s ozone problem is largely not of Phoenix’s making. Independent modeling by both the Maricopa Association of Governments and the EPA found that approximately 80 percent of the ozone in the region comes from natural sources or emission sources outside the nonattainment area, including pollution transported from Mexico and Asia, and wildfire smoke.

MAG, the regional planning agency for metropolitan Phoenix, said it had been advocating for the exemption since the Biden administration. It formally submitted its demonstration to EPA in September 2025, and the Phoenix ruling marks the first time the EPA has used its Section 179B authority since Administrator Lee Zeldin rescinded prior guidance that had made the process difficult for states to navigate.

Danny Seiden, president and CEO of the Arizona ˿����Ƶ of Commerce & Industry, called the outcome long overdue. “For decades, Arizona’s businesses have done everything right,” Seiden said. “They’ve invested in cleaner operations, embraced new technology, and helped cut the region’s air pollution by roughly 70 percent since 1990 — all while our economy and population grew dramatically.”

The National Association of Manufacturers weighed in quickly after the ruling, saying the EPA decision gives Arizona’s manufacturers greater flexibility to grow while advancing environmental stewardship. The NAM also called on Congress to build on the momentum by modernizing the Clean Air Act’s permitting process, noting that manufacturers consistently cite Clean Air Act permits as the most burdensome approval process they face.

said the ruling reflects the agency’s broader approach under Administrator Zeldin. “This action is yet another example of the Trump EPA making sure we are not punishing Americans for emissions from countries that do not have our same environmental standards,” Martucci said.

Under the final determination, the Phoenix-Mesa area remains classified as Moderate nonattainment and is not subject to reclassification requirements or the more burdensome permitting and offset requirements that would have come with a Serious designation. All other existing Moderate area obligations remain in effect.

Seiden said the ˿����Ƶ would continue to watch the ruling closely. “We stand ready to vigorously defend this decision against any effort to undo it,” he said.

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From off-road vehicles built for Arizona’s rugged terrain to partnerships that support small businesses, public safety, and workforce development, Polaris Inc. has established itself as a leader in innovation and outdoor recreation. With a growing presence in the state and an active role in public policy discussions, Polaris continues to shape the future of powersports while investing in the communities it serves. In this ˿����Ƶ Business News Member Spotlight, J.R. Burke, senior director of government relations & legal – on-road, shares insights into the company’s operations, policy priorities, and commitment to Arizona.

What is Polaris?

Polaris has spent over 70 years designing, engineering, and manufacturing products that help people do more outside. We were founded in Roseau, Minnesota – a town about 10 minutes from the Canadian border. Since creating our first snowmobile in Roseau in 1954, Polaris has transformed from a regional manufacturer into a global powersports leader. Consistently redefining market segments through relentless innovation, we are best known today for our off‑road vehicles, snowmobiles, and marine brands. From the Polaris RANGER and RZR, to our other leading brands like the Polaris Slingshot and Bennington pontoons, our products are fan-favorites. At our core, Polaris is focused on building high-quality products that meet real‑world needs while being a strong partner to the communities where we operate.

Can you talk about your areas of focus (off road, on road, marine) and the markets in which you do business?

Polaris operates across three primary segments: off‑road vehicles, on‑road vehicles, and marine. Our off‑road vehicles—including side‑by‑sides and ATVs—are widely used for recreation, agriculture, ranching, land management, and public safety. Snowmobiles remain a strong business for Polaris, and we hold the #2 market share position in the industry. With its bold styling, our Slingshot vehicles offer distinctive three‑wheeled, open‑air on-road experience and are introducing new customers to powersports and Polaris. Through our Polaris Marine segment, we have the #1 pontoon brand in the market with Bennington pontoons, as well as Hurricane deck boats and Godfrey pontoons.

What makes Arizona a great place for Polaris to do business?

Arizona’s vast public lands and diverse outdoor landscapes offer exceptional opportunities for recreation. Polaris’ powersports products are uniquely built to meet the needs of Arizonans—whether their adventures take them onto trails, along the state’s scenic highways, or out on the water. Our network of independent dealer partners across Arizona play a critical role in bringing these experiences to life for our customers. In our work at the Capitol over the past several years, we’ve consistently met with legislators who share our commitment to supporting small businesses and manufacturers like Polaris. Their partnership helps ensure we can continue delivering the innovative products our customers expect.

Are there any policy priorities you’re focusing on in Arizona?

Polaris supports policies that encourage economic growth, protect access to public lands, and provide regulatory clarity for manufacturers and consumers alike. As a manufacturer representative on the Arizona OHV Study Committee, we have focused efforts to create policies that create safe experiences for motorized and non-motorized recreants on public lands and to modernize Arizona’s OHV laws to reflect advances in vehicle design that our customers expect. We value the working collaborations we’ve been able to establish with lawmakers and stakeholders alike to provide industry insight and support balanced solutions.

Do you partner with vocational/technical programs and higher education to hire talent?

Yes, Polaris actively partners with nonprofits, technical and higher‑education institutions to help build the next generation of skilled workers, both at Polaris and within our dealer network. These partnerships focus on manufacturing, engineering, skilled trades, and dealer service technicians—areas critical to long‑term economic growth and the future of the powersports industry. We support internship programs, curriculum alignment, and hands‑on learning opportunities that connect students directly to career pathways. For example, in 2025 Polaris invested $80,000 in our S.T.E.P. scholarships program to help support the next generation of powersports technicians. Additionally, more than 1,000 students across 45 schools also received free access to Polaris eLearning focused on the maintenance of Polaris vehicles. 

How do some of your products support the farm and agriculture industry?

Many farmers and ranchers trust Polaris off-road vehicles as essential tools for daily operations. Our side‑by‑side vehicles are used for hauling, fencing, irrigation checks, livestock management, and general property maintenance. These vehicles are designed to be durable, reliable, and adaptable to tough working conditions, qualities that are critical for customers who count on their vehicle to help them get the job done. Polaris products help them be more productive while reducing physical strain and time spent on manual tasks. Supporting the farm and agricultural community is a natural extension for Polaris. In fact, last year we ran our Ag Advantage program, a promotional offer that was available only to farmers and ranchers as our way to show our support for this hard-working community. We will continue to look for ways to show our appreciation for them.

Can you talk about your defense and government vehicles, as well as your partnership with the federal government?

Polaris has worked closely with the U.S. Department of Defense and other state and federal agencies to deliver platforms used in border patrol, police, fire and rescue calls, disaster response, and worldwide supporting our military. We design and manufacture the most capable light tactical military vehicles available today with technology development and insertion for the battlefield of tomorrow. Our military vehicles have become force multipliers for expeditionary forces. Polaris is proud to have a dedicated Defense business that can leverage everything Polaris has to offer – for military forces worldwide. Almost half of the team are vets – ranging from elite special forces, helicopter pilots and military maintainers. Outside of our Defense business, our Government team is a trusted partner of many federal, state, and local government organizations, providing the most complete lineup of side-by-sides for public safety uses.

How does Polaris engage with the community?

Community engagement is an important part of how Polaris operates, particularly around responsible riding and helping to take care of the places our vehicles are used. We partner with local organizations, riding clubs, our dealers, and non-profits, like the National Forest Foundation, on projects such as responsible riding education, trail maintenance and improvements, and environmental stewardship initiatives. In Arizona alone, Polaris has donated over $125,000 through these types of programs. For example, last year, in partnership with the National Forest Foundation, we helped improve navigation, promote responsible riding, and helping protect natural resources through the production and installation of new signage in the Coconino National Forest and we have some more exciting projects coming up in Arizona later this year. These efforts help ensure public lands remain accessible, safe, and sustainable for multiple uses. Our approach is grounded in being a good neighbor and a long‑term community partner.

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Arizona’s global economic profile soared in 2025 as the state posted record-breaking international trade and foreign direct investment figures, underscoring its emergence as a leading U.S. hub for advanced industries and global commerce.

According to from the Arizona Commerce Authority, the state’s exports and imports expanded significantly, with strong gains across high-tech sectors and an especially notable rise in trade with Taiwan.

Arizona companies exported $44.4 billion in goods in 2025 — a 37 % increase over the prior year and among the fastest export growth rates in the nation — far outpacing the U.S. average. The state also saw massive increases in imports and international investment, creating thousands of new jobs statewide.

Key highlights include Arizona’s top rankings in several advanced export categories:

• #1 in Metal Ores ($2.7 B, +19.9 %)
• #3 in Computer Equipment ($9 B, +205 %)
• #5 in Semiconductors & Electronic Components ($6.3 B, +84 %)
• #8 in Medical & Control Instruments ($2.4 B, +14 %)
• #10 in Aerospace Parts ($5.6 B, +4.3 %)

These gains reflect Arizona’s continued strength in manufacturing, technology, and innovation, all sectors that are driving the state’s global export footprint.

“Arizona has emerged on the world stage as a global economic powerhouse, leading to more family-sustaining jobs and generational opportunity for Arizonans,” said Governor Katie Hobbs. “I’m proud that Arizona is setting the pace for innovation and technological progress and proving what’s possible when we lead boldly.”

Taiwan’s rapid climb on Arizona’s trade chart

One of the most striking developments in the new data is the surge in economic exchange with Taiwan. In 2025, Taiwan surpassed both Canada and China to become Arizona’s second-largest trading partner behind Mexico, with total trade exceeding $21.2 billion.

This remarkable rise marks a major shift in Arizona’s global trade relationships and underscores the deepening economic ties between the state and one of the world’s most important technology and manufacturing economies. Led by key components and advanced technologies, Arizona’s imports from Taiwan rose sharply, while exports also expanded meaningfully.

The upswing with Taiwan reflects successful international trade missions, enhanced business partnerships, and increased cross-border investment activity. Earlier efforts by state leaders to promote Arizona’s workforce, innovation ecosystem, and business climate abroad have helped elevate the state’s global competitiveness, particularly in sectors like semiconductors and computing. The growing collaboration also mirrors broader geopolitical trade developments boosting tech-focused cooperation between the U.S. and Taiwan.

˿����Ƶ and Business Leaders Weigh In

Business and civic leaders highlighted the significance of these gains for Arizona’s long-term economic prospects. Danny Seiden, president and CEO of the Arizona ˿����Ƶ of Commerce & Industry, emphasized the role of sound public policy and a stable business climate in fueling trade growth.

“Arizona’s growth in global trade didn’t happen by accident. It reflects years of smart policy, collaboration between the public and private sectors, and a business climate that gives companies the confidence to invest, hire, and expand here,” Seiden said. “These record trade gains underscore why a competitive, predictable environment matters.”

Sandra Watson, president and CEO of the Arizona Commerce Authority, noted that the state’s strategic emphasis on international engagement is paying dividends across industries, driving job creation and innovation opportunities for communities statewide.

“Arizona’s global prominence has never been greater,” Watson said. “Our record-setting trade and investment reflect a bold strategy and strategic partnerships, leading to more jobs, innovation, and opportunity for communities across our state.” 

Arizona’s global economic outlook

With more than $195 billion in foreign direct investment announced since 2020 and a robust pipeline of projects from international partners including Taiwan and Japan, Arizona’s role on the global economic stage continues to strengthen. The state attracted 55 new foreign investment projects in 2025 alone, projected to generate more than 25,000 new jobs.

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The state House Commerce Committee on Tuesday advanced HB 4026, legislation sponsored by Rep. Michael Carbone (R-Buckeye) that modernizes and strengthens a public infrastructure tool that has helped make Arizona a national leader in advanced manufacturing investment.

The bill, supported by the Arizona ˿����Ƶ of Commerce & Industry, the Arizona Manufacturers Council, and a broad coalition of business and community leaders, ensures that Arizona communities have the infrastructure capacity necessary to compete for high-wage manufacturing projects.

Modernizing a proven program

Arizona’s Public Infrastructure Program was established in 2012 and has since helped secure billions of dollars in private capital investment, positioning the state as the nation’s leader in semiconductor manufacturing investment.

The program allows cities, towns, and counties to recapture a portion of construction-related state sales tax revenues generated directly by a qualifying manufacturing project and reinvest those dollars into public infrastructure improvements — including roads, water, wastewater, and reclamation systems — that support both the facility and the broader community.

During committee testimony, advocates pointed out that the program does not create new taxes and instead reinvests tax revenue generated by the project itself into infrastructure that makes the investment possible.

Addressing a critical cap

Under current law, total distributions under the program statewide are subject to a $200 million lifetime cap. But as supporters pointed out in the hearing, the arbitrary cap is rapidly being reached, putting current and future public infrastructure projects at risk of being underfunded and limiting Arizona’s ability to compete for the next generation of mega-projects.

“This program has worked in helping cities build the infrastructure they need to support these massive projects,” Arizona ˿����Ƶ Executive Vice President Courtney Coolidge said. “We don’t win these projects every day, but when we do, they’re a huge benefit to the entire state, supporting jobs, tax revenue, and small business.”

The legislation replaces the lifetime cap with a $75 million annual cap, providing predictable, statewide access to the program. The bill also clarifies that payments are limited to the lesser of the state transaction privilege tax revenues generated from construction of the facility or 80% of the public infrastructure cost.

Queen Creek Mayor Julia Wheatley told committee members the program was essential to her town’s ability to attract a huge LG Energy investment on a former state land trust plot.

“In order to build on that barren state trust land, the town needed to build supporting public infrastructure,” she said. “Building the infrastructure from scratch was a very costly endeavor for the town and we needed to utilize the public infrastructure program to help us recapture some of the $84 million in public investment from revenues generated as a result of LG’s own state construction sales tax dollars.”

Strengthening accountability and transparency

HB 4026 enhances oversight by requiring a detailed analysis of the anticipated direct and indirect revenues the state will receive as a result of constructing the manufacturing facility, which must be provided to the Arizona Commerce Authority.

The bill also requires development and intergovernmental agreements entered into under the program to be posted publicly on the Department of Revenue’s website, further reinforcing transparency.

Supporting high-wage jobs, long-term growth

Greater Phoenix Economic Council Vice President Tim Bourcet said that as Arizona competes nationally and globally to attract advanced manufacturing projects, particularly in semiconductors and other high-tech sectors, infrastructure readiness is often the deciding factor.

“The public infrastructure reimbursement program has been vital to the advanced manufacturing industry,” he said, pointing out that the program has played in role in investments by companies like TSMC and Amkor, in addition to the LG project in Queen Creek. “Modernization is now a necessity to continue to be the number one destination for advanced manufacturing in the United States.”

By modernizing the distribution cap while maintaining strong accountability measures, HB 4026 ensures that Arizona has the policy tools to remain competitive in the race to onshore advanced manufacturing.

The bill now advances to the Rules Committee and to reviews by each party’s caucus and then to a vote of the full House. Assuming passage, the bill will repeat the process in the state Senate in the coming weeks.

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Arizona’s business and manufacturing community is closely watching a new proposal from the U.S. Environmental Protection Agency that would restore a more cooperative, state-led approach to air quality regulation and remove Arizona from the Biden-era “Good Neighbor Plan.”

EPA late last month proposed approving Arizona’s State Implementation Plan (SIP) for the 2015 eight-hour ozone National Ambient Air Quality Standards. If finalized, the action would resolve Arizona’s interstate transport obligations and allow the state to move forward under its own air quality plan rather than being subject to a broad federal mandate.

EPA Administrator Lee Zeldin framed the proposal as a course correction from prior federal overreach.

“Today, we are taking an important step to undo a Biden Administration rule that treated our state partners unfairly,” Zeldin said. “If the SIPs are approved as proposed, these states will be able to advance cleaner air now for their communities, instead of waiting for overly burdensome federal requirements years from now.”

Relief from a one-size-fits-all rule

The original “Good Neighbor Plan,” finalized under the Biden administration, imposed new emissions requirements across 23 states, including Arizona, targeting power plants and a wide range of industrial sectors — from cement and steel manufacturing to chemical production, mining and pulp and paper mills.

Arizona, along with several other states, demonstrated through EPA-approved modeling that in-state emissions were not significantly contributing to ozone nonattainment in downwind states. Despite that data, Arizona faced partial disapproval of its SIP and inclusion in the federal rule.

That approach was paused in June 2024 when the U.S. Supreme Court stayed the rule, citing serious legal concerns. Subsequent federal court decisions also vacated SIP disapprovals for other states, adding uncertainty for employers and regulators alike.

The current EPA proposal would bring clarity and certainty, particularly for energy-intensive industries that depend on reliable power, long-term planning and predictable regulatory frameworks.

Manufacturers support cooperative federalism

Arizona manufacturers have long supported clean air goals while cautioning against regulatory approaches that fail to reflect state-specific conditions or economic realities.

“Arizona manufacturers care deeply about clean air and healthy communities,” said Grace Appelbe, executive director of the Arizona Manufacturers Council. “But broad federal mandates that ignore state-specific data risk driving up energy costs, disrupting supply chains, and discouraging investment. Approving Arizona’s state plan recognizes that we can protect air quality while maintaining a competitive manufacturing environment.”

Business leaders have warned that the earlier federal rule could have accelerated power plant retirements or forced costly compliance investments without delivering proportional air quality benefits in states like Arizona.

What’s next

EPA’s proposal will be subject to a 30-day public comment period following publication in the Federal Register. The agency has indicated it will take additional, separate actions to address remaining states previously covered by the “Good Neighbor Plan.”

Image AI composite, using images courtesy CC BY-SA 2.0 , via Wikimedia Commons; CC BY 2.0; and CC BY-NC-ND 2.0

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