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Frankly, I hope everyday that I wake up to find that the United States has not become a failed state though half expecting it has. The party in power has as an more or less explicit goal to tear down the government. Whether by neglect or self sabotage they are keep trying and only the inertia of the government keeps things going. Remember the last administration that thought government was a good thing that built roads and steadied markets also struggled to modernize "legacy" IT infrastructure. So regulation by the United States probably wouldn't be more than a token effort even if this legislation passed.

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They both have stated that they will not press charges and indeed are allowing the workers to return.

Markets have not failed at self-regulating. This claim is impossible on its face because we don’t have a free market in America. The US, from the 20th century to now, has one of the most overbearing bureaucratic regulatory states in world history (outside of some expressly communist or fascist countries). Even modern China has a more free market than modern America.

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So I think that we need to start thinking of this a global problem. Sure the United States thinks it is the leader in IoT but all the devices I have worked with have been manufactured in Asia. I mention this because I think the legislation proposed is almost as good as it could have gotten. We style ourselves in the United States as a capitalist market based economy and by and large we are proud when our government takes market based approaches to problems (right or wrong). So by using the bully pulpit of being a huge consumer our government proposes to sway the market by buying more secure devices (notice not secure just a bit more secure than the market average). This means our government has placed some value on its IoT infrastructure being secure which is the same as recognizing the economic downside of exploitation. Here's the problem our government is a mess. It can't possibly make security decisions about things that are practically disposable. Now if we got all the "western" powers to buy a bit more secure that's a bigger chunk of consumers and a bit more push but we can also start to see the more global nature of things.