The White House has announced President Joe Biden will sign an executive order designed to create “resilient and secure supply chains for critical and essential goods.”
In a release, the government said “American households, workers, and companies have increasingly felt the strain of shortages of essential products – from medicine to food to computer chips.” They went on to note this became painfully clear during the early stages of the coronavirus pandemic as personal protective equipment – such as masks and face shields – was in short supply.
While PPE is now more readily available, other shortages exist and the government noted “recent shortages of automotive semiconductor chips have forced slowdowns at car manufacturing plants, highlighting how shortages can hurt U.S. workers.”
As a result, the Biden administration says the government “must ensure that production shortages, trade disruptions, natural disasters and potential actions by foreign competitors and adversaries never leave the United States vulnerable again.”
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To address this, President Biden will sign an executive order that seeks to “comprehensively address supply chain risks” while also securing “well paid jobs for communities across our country.”
As part of the order, the government will conduct an immediate 100-day review to address vulnerabilities in the supply chains of four key products including APIs, which are the part of a pharmaceutical product that contain the active drug.
On the automotive side of things, agencies will work to secure critical minerals such as “rare earths” used in electric motors. The ultimate goal is to ensure the U.S. isn’t dependent upon foreign sources or single points of failure in times of national emergency.
Speaking of EVs, the government wants to ensure the U.S. can produce large capacity batteries as electric vehicles are key to fighting climate change. The White House went on to say “while the U.S. is a net exporter of electric vehicles, we are not a leader in the supply chain associated with electric battery production.” As a result, the U.S. wants to leverage their “sizeable lithium reserves and manufacturing know-how to expand domestic battery production.”
Last but not least, the Biden administration wants to increase domestic production of semiconductors. The government contends underinvestment has been “hurting our innovative edge” and other countries have learned from our mistakes.
The 100-day review is designed to identify near-term steps the government can take to address vulnerabilities in supply chains. The order also calls for a more in-depth one-year review of a broader range of supply chains including those that support the defense industrial base, public health, information and communications technology, the energy sector, transportation industries, and supply chains for agricultural commodities as well as food production.
The ultimate goal is increase domestic production, create jobs and make the United States less dependent on countries such as China. Of course, the government can only do so much as companies have the ultimate say on where they build things.
