Biden Signs Order to Bolster Critical U.S. Supply Chains

President Joe Biden on Wednesday will order a government review of U.S. supply chains, seeking to end the country’s reliance on China and other adversaries for crucial goods.

But the process will take months, offering no immediate solution for a shortfall of semiconductors that’s idled auto production at several factories.

The administration’s 100-day review will cover chips but also include large-capacity batteries, pharmaceuticals and critical minerals and strategic materials like rare earths, according to a White House statement.

The issue has taken on urgency with a global chip shortage that’s forced some U.S. carmakers to idle plants. The supply disruptions threaten to harm U.S. economic growth and could lead to layoffs, prompting concern from the White House as Biden seeks to rebuild an economy battered by the coronavirus.

“This last year has shown the vulnerabilities we have with some of the supply chains,” Biden told reporters at the White House on Wednesday, as he described shortages of personal protective equipment amid the pandemic. The president also mentioned the impact of chip shortages on the auto industry, saying it’s “causing some lines to slow down” and “people might be laid off.”

Biden’s executive order isn’t aimed at China or any one country but instead focuses on diversifying supply more generally, according to White House officials who spoke on condition of anonymity. Still, they said an over-reliance on China and other adversaries for critical goods is a key risk that must be addressed.

Biden’s review could lead to financial incentives, tariffs or changes in procurement policies, among other options, one of the officials said. The administration plans to consider ways to encourage production of key items in the U.S. or work with allies to manufacture the items, the official added.

Biden met with a group of lawmakers from both parties at the White House Wednesday afternoon to discuss the semiconductor shortage, and ways to strengthen supply chains.

Senate Majority Leader Chuck Schumer said he is asking the chamber’s top Democrats and Republicans to draw up legislation aimed at improving U.S. competitiveness with China in manufacturing and technology, including bolstering the supply of American-made semiconductors.

Biden’s top economic adviser, Brian Deese, last week sought the Taiwanese government’s help in resolving the chip shortage that’s hindering U.S. automotive manufacturing and starting to spill into other industries. His appeal followed earlier pleas from Japanese and European officials for Taiwan’s assistance in ensuring supply.

The Biden administration has also asked U.S. embassies around the world to identify how foreign countries and companies that produce chips can help address the global shortage and to map the steps taken to date.

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