President Joe Biden signed an executive order on Feb. 24 to bolster the resilience of supply chains for four critical industries following a slew of recent production shortages that have left the United States vulnerable.
The executive order will begin a 100-day review of semiconductor chips, pharmaceuticals, rare-earth minerals, and large-capacity batteries used in electric vehicles.
While White House officials on Feb. 23 said the action doesn’t target any one country, it will direct the United States to diversify its supply chain reliance on China—one of the dominant players in the rare-earth and pharmaceutical fields.
The measures come at a time when the pandemic has put a strain on the availability of personal protective equipment essential to frontline health workers, and a shortage of computer chips has forced automakers to cut production, highlighting the need for reshoring supply chains.
The order will also call for a comprehensive one-year review of six key sectors, covering areas of defense, public health, communications technology, transportation, energy, and food production.
“This is about making sure the United States can meet every challenge we face in this new era: pandemics, but also in defense, cybersecurity, climate change, and so much more,” Biden said before signing the order. He added that the best way to achieve that is by “sharpening America’s competitive edge by investing here at home.”
The “horror stories” of health care workers having to wear trash bags and rewashing their masks for lack of proper gear at the onset of the pandemic “should have never happened, and it will never happen again in the United States, period,” he said.
“We shouldn’t have to rely on a foreign country, especially one that doesn’t share interests or our values, in order to protect and provide for our people during a national emergency.”
Biden said the policy recommendations that arise from the reviews will be implemented “right away” to close existing gaps.
The review will “draw on a full range of American talents,” such as policymakers, scientists, pharmacists, and engineers, for their input, he said, expressing appreciation for the bipartisan leaders who came to meet with him over the issue.
“They are leading the way,” he said. “Everyone has a role to play to strengthen our supply chain and our country.”
Chip scarcity has been a growing headache for the United States. While U.S. semiconductor firms create 47 percent of global chip sales, the U.S. share of global chip production has plunged to 12 percent from 37 percent over the past three decades due to increased outsourcing of manufacturing, according to the Semiconductor Industry Association.
Ford recently said it may have to cut up to 20 percent of production in the first quarter due to a semiconductor shortage. General Motors has also temporarily slashed production in its United States, Canada, and Mexico plants.
The organization urged the administration to “invest ambitiously in domestic chip manufacturing and research” so that “more of the chips our country needs are produced on U.S. shores.”
The Biden administration is under bipartisan pressure to invest in emerging technologies and counter threats posed by China’s ruling communist party.
Last month, nearly two dozen Republican House lawmakers wrote a joint letter calling on Biden to work with allies on the development of technologies such as artificial intelligence, quantum computing, semiconductor chips, and 5G communications “in order to challenge China’s goal of total global technology leadership and tech authoritarianism.”
Senate Majority Leader Chuck Schumer (D-N.Y.) directed lawmakers on Feb. 23 to draft a bill to invest $100 billion on research for key high-tech areas in a bid to “out-compete” China.
He particularly emphasized semiconductors as “a dangerous weak spot in our economy,” saying, “We can’t let China get ahead of us in chip production.”
Biden officials have projected a tough line on China but said they would also focus on building an alliance in a more multilateral approach.