Biden Signs Order Seeking Homegrown Fixes For Shortfalls Of Foreign-Made Items
Updated at 6 p.m. ET
Shortages of medical supplies and ingredients for pharmaceuticals came into stark focus during the early days of the coronavirus pandemic, when hospital workers resorted to reusing masks and gloves to try to keep themselves safe from COVID-19.
More recently, automakers were forced to shut down plants because of a shortage of computer chips, putting workers on furlough.
The supply chain failures are two examples of why the Biden administration wants to jump-start production of critical materials that go into cellphones, computers, cars, medicine and other sectors.
"The American people should never face shortages in these goods and services they rely on, whether that's their car, the prescription medicines or the food at the local grocery store," President Biden said as he signed an executive order to kick off a sweeping review of critical supply chains.
The order doesn't single out China, but it's very much about countering the United States' biggest economic competitor. Biden said the pandemic revealed how dangerously reliant the U.S. has become on foreign countries for critical materials.
"We shouldn't have to rely on a foreign country — especially one that doesn't share our interests or our values — in order to protect and provide our people during a national emergency," Biden said.
The issue is a rare source of bipartisan agreement in Congress. Biden met with a group of lawmakers who have worked on the problem, including Texas Sen. John Cornyn, a Republican. Biden said it was one of the best meetings he'd had during his time in office thus far.
"John Cornyn and the bipartisan group here put together an effort last year that I think is a pretty good effort on how to deal with these chips," Biden said, holding up one of the tiny semiconductors.
Cornyn is a one of the sponsors of a bill that would give incentives to new U.S. semiconductor plants. "We all understand this is important, not only to our economy, but to our national security," Cornyn told reporters after the Oval Office meeting.
John Neuffer, the chief executive of the Semiconductor Industry Association, says the shortages caused by the pandemic demonstrated how quickly problems can get out of hand if even just one piece of the supply chain is broken — or delayed.
"For the long term, I think what the review is going to find is we need to have more semiconductors made here in the good 'ol U.S. of A.," said Neuffer, whose organization represents companies like Intel, Micron and Qualcomm.
"Right now, most of them are made overseas. And I think this pandemic has put in focus the reality that some of our supply chains need to be rebalanced," Neuffer said in an interview with NPR.
An initial 100-day review will look at four products: chips, large capacity batteries used in electric cars, pharmaceuticals, and rare earth minerals. Then, the administration will take a closer look at six sectors: defense, public health and biological preparedness, communications technology, transportation, energy, and food production.
Biden and his officials said the White House would push for fixes as they find them, though they cautioned that repairing gaps in supply chains was a long-term project.
"We are going to get out of the business of reacting to supply chain crises as they arise and get into business of preventing future supply chain problems," said Peter Harrell, a senior director at the National Security Council.
Officials said investments in domestic manufacturing would also create jobs, but did not give specifics how the initiative could offset the exodus of factory work offshore over the last two decades.
"We think it's important to have a broad lens and broad view on how you measure the jobs and the job creation in the manufacturing space," said Sameera Fazili, deputy director of the National Economic Council, noting the initiative could create research and development jobs.
"Because manufacturing doesn't just support and create jobs in the manufacturing sector, there are broad spillover effects that it has," Fazili told reporters.
Evan Medeiros, who was the top adviser on Asia in the Obama White House, said topics like supply chains for critical minerals may sound wonky, but they are incredibly important to everyday life.
But they're also important to the United States' position in the world and Biden's promise to return America to its leadership position.
The challenge for Biden is trying to balance deepening economic interdependence with a country that he also sees as its biggest competitor — and an increasing national security threat.
"Biden starts out by framing it in this way," said Medeiros, now at Georgetown University, "but the economic realities of the world are such that it's not really us versus them because we have a $650 billion trading relationship with the country that's at the heart of what Biden says is a resurgence in authoritarianism."
While the United States and western allies are not going to cut off China, Medeiros said it can ensure there is resiliency and redundancy and diversity in the supply chains
Biden has said China is the "most serious competitor" to the United States and earlier this month, he warned a bipartisan group of senators that China is aggressively outpacing the United States on infrastructure.
"If we don't get moving, they're going to eat our lunch," he said.
China produces most of the world's supply of rare earth minerals used in phones, the defense sector, and electric cars. "We're probably a little bit overly dependent there on a single source," an official told reporters. The United States could look at options like recycling, or other partners in Latin America or Asia, to become less reliant, the official said.
James Litinsky, the chairman of MP Materials, runs a California rare earth mining company. He said ensuring more domestic supply is key.
"As a country, we need to make sure that we have our own capability in the event that — and even if it's not a direct conflict — just from a competitive economic standpoint, of recognizing that these materials are going to be highly coveted because they're going to be in short supply," Litinsky said in an interview.