How Will Tariffs Affect BEAD Funding?

Tariffs Expected to Have Limited Impact on BEAD & Broadband

New tariffs announced by President Donald Trump are expected to have only a limited direct impact on broadband projects funded by the Broadband Equity, Access, and Deployment (BEAD) Program, thanks in part to existing Build America, Buy America (BABA) Act requirements.

That’s according to Dr. Nathan Smith, Director of Economics and Policy at Connected Nation.

In comments to Broadband Communities, Smith explained that many of the network components used in BEAD-funded projects were already subject to BABA rules, which restrict the use of lower-cost materials from abroad.

“ISPs that accepted BEAD funds were already required, for most network components, to comply with BABA restrictions, which barred them from sourcing key inputs like fiber-optic cable more cheaper foreign options,” Smith said. “So, the added cost from the new tariffs is relatively modest.”

Indirect Effects of Tariffs

However, Smith cautioned that indirect effects could still create headwinds.

“Macro-level impacts from tariffs—like shifts in labor availability or capital costs—could influence BEAD projects more than the direct cost of imported goods,” he said.

Smith’s recent comments echo views he shared in March on the Beyond the Cable podcast, where he expressed optimism about the BEAD Program despite early challenges.

“There’s been a lot of frustration that it took so long to actually connect anybody to broadband,” he said. “But that was kind of by design. You needed extensive planning to aim for universal coverage.”

Still, he noted that challenges remain.

“While BEAD prioritizes fiber, the reality is you can’t deploy it everywhere,” stated Smith. “In some areas, it’s just not economically feasible to build a full fiber network.”