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White House Outlines Strategies to Address Supply Chain Disruptions

  • White House issues 250-page report detailing findings and recommendations after review of supply chain vulnerabilities
  • Semiconductors, large capacity batteries, critical minerals and materials, and pharmaceuticals get particular attention
  • Investments, financing priorities, trade agreement reviews, and other strategies for both the near-term and long-term

Summary by Dirk Langeveld

The White House has issued a set of strategies aimed at building more resilient supply chains and addressing persistent short-term disruptions that accompanied the COVID-19 pandemic.

The Biden administration says the pandemic demonstrated the fragility of current supply chains in the United States and the potential threat they pose to stability and national security when disrupted. It said that while COVID-19 proved to be a major disrupter, supply chain weaknesses have also been exacerbated by long-term trends such as unfair trade policies and business prioritization of low-cost labor and just-in-time production.

Following an executive order directing a 100-day review of American supply chains, the White House has released a 250-page report detailing the findings. The report was issued on the same day that the Senate passed a bipartisan measure that included $52 billion in funding for initiatives to bolster semiconductor production in the United States, a move closely aligned to a recommendation included in the White House report.

The report suggests that the U.S. is overly reliant on foreign imports for several key items, including semiconductors, large capacity batteries for purposes like electric vehicles and stationary energy storage, critical minerals and materials, and pharmaceuticals. It recommends efforts such as increasing domestic production along with research and development and worker training, building diversified supply chains, and making efforts to support sustainable practices and fair labor standards.

The Biden administration says it will take several steps to further research issues related to bolstering supply chains. These include a public-private consortium to choose up to 100 critical drugs to prioritize in onshoring efforts, a working group to determine where critical minerals could be produced and processed in the U.S., and a task force to monitor and address near-term supply chain issues, with an immediate focus on homebuilding and construction, semiconductors, transportation, and agriculture and food.

Other initiatives directly relate to financing for federal grants and contracts. These include the Department of Defense deploying Defense Production Act Title III incentives to “support sustainably-produced strategic and critical materials,” a $100 million grant program through the Department of Labor to support state-led apprenticeship expansion efforts and establish a national Registered Apprenticeship Technical Assistance Centers of Excellence, requiring awardees of the Department of Energy’s Science and Energy Programs to substantially manufacture their products in the U.S., a proposed rule to give preference in federal contracting to critical products that are in manufactured products or component parts under the Buy American Act, and $4 billion in supply chain initiatives through the Department of Agriculture to build resilience in food production, processing, and distribution.

The report recommends numerous investments, including asking Congress to approve at least $50 billion to advance domestic manufacturing of semiconductors and semiconductor R&D. It also recommends $50 billion for a Supply Chain Resilience Program overseen by the Department of Commerce and incentives for the consumer adoption of U.S.-built electric vehicles, including $15 billion for charging infrastructure and $5 billion to electrify the federal vehicle fleet.

Other proposed initiatives include a “trade strike force” led by the U.S. Trade Representative to propose unilateral and multilateral actions against unfair trade policies, recapitalizing and restoring the National Defense Stockpile of critical minerals and supplies and encouraging private sector firms to develop their own stockpiles to weather disruptions, and having government agencies support investments in critical technologies where supply chain improvement is necessary.

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