Supply chain leaders rejoice; Resiliency at the White House
It seems this little buzzword buzzed it’s way all the way to the white house, and supply chain leaders and speakers rejoiced, sharing the news, opinions, smiley faces and words of joy. And, of course, in true supply chain style, some even hawking their wares.
These words, issued by the White House in its , cement the criticalness of not letting this little buzzword that could die off. After a year of disruption felt the world over, both from Covid-19 and politically backed cyberattacks, If there was any doubt left to the imperativeness of resilience building, let’s hope this killed it.
“Resilient American supply chains will revitalize and rebuild domestic manufacturing capacity, maintain America’s competitive edge in research and development, and create well-paying jobs. They will also support small businesses, promote prosperity, advance the fight against climate change, and encourage economic growth in communities of colour and economically distressed areas.
“More resilient supply chains are secure and diverse — facilitating greater domestic production, a range of supply, built-in redundancies, adequate stockpiles, safe and secure digital networks, and a world-class American manufacturing base and workforce. Moreover, close cooperation on resilient supply chains with allies and partners who share our values will foster collective economic and national security and strengthen the capacity to respond to international disasters and emergencies.”
And with that, those long fighting the importance of supply chain management, risk mitigation and resilience-building rejoiced..
The executive order will kickstart a 100-day review of the supply chains of four vital products— semiconductors, rare earth metals, pharmaceuticals, and large capacity electric car batteries. The order also includes a longer review of another six sectors including defence, food production, and public health. Prior to signing the order, Biden remarked, "The bottom line is simple: The American people should never face shortages in the goods and services they rely on, whether that's their car or their prescription medicines or the food at the local grocery store."The order not only underscores the White House’s commitment to promoting U.S. manufacturing but highlights the importance of mitigating all areas of risk that lay within supply chains, including the geopolitical. "This is about making sure the United States can meet every challenge we face in this new era. Pandemics, but also in defence, cybersecurity, climate change and so much more. And the best way to do that is by protecting and sharpening America's competitive edge by investing here at home," he said. Federal agencies will be expected to make recommendations to address identified risks, however, long-term policy implications are yet unknown. As former Clinton administration Commerce Department official William Reinsch told the Washington Post, “A review is just a review— no immediate consequences.”
The White House Launches Supply Chain Task Force
The Biden Administration has released its 100-day supply chain assessment for semiconductor manufacturing and advanced packaging, large-capacity batteries, critical minerals and materials, and pharmaceuticals. After a year in which supply chains throughout the nation were decimated by the pandemic, the new task force intends to get the country back on track.
These measures come just in time. Semiconductor shortages have crippled the nation’s automotive manufacturers, and the new Innovation and Competition Act will strain ties between the U.S. and China. The United States needs to invest in resilient and secure supply chains, as well as help its manufacturing companies survive the pandemic.
What’s Happened Already?
Since February, the administration’s COVID-19 response team has vaccinated 137 million Americans, worked with semiconductor manufacturers, expanded rare earth element mining outside of China, and addressed supply chain cyber vulnerabilities. “Unfair trade practices by competitor nations, private- and public-sector prioritisation of low-cost labour and a focus on short-term returns over long-term investment have hollowed out the U.S. industrial base”, said the White House.
To address risks and vulnerabilities, the administration will also prioritise the following steps:
- Commit US$60mn to develop novel platform technologies to boost API production
- Develop a domestic lithium battery supply chain to combat the climate crisis
- Support manufacturers of advanced battery cells and packs with US$17bn in loans
- Invest nearly US$75bn in semiconductor manufacturing
- Give US$100mn in grants to state-led supply chain apprenticeship programmes
In addition, the White House recommended that the nation should establish a Supply Chain Resilience Programme backed by US$50bn in domestic supply chain investments.
An International Effort
Although the United States has recently doubled down on hardline stances against foreign trade competition—one need only look at its recent Senate bill—the scale of its supply chain transformation programme requires partnership. “Even as the U.S. makes investments to expand domestic production capacity for some critical products, we must work with allies to secure supplies of critical goods that we will not make in sufficient quantities at home”, the White House stated.
In the coming months, the U.S. will work with international allies such as the Quad and the G7 in order to diversify its networks, ensure human rights compliance, and source critical minerals and materials. And though the nation is aggressively investing in R&D and competitive technology, it wants to maintain its global trade ties. “U.S. investments abroad must incentivise environmentally and socially responsible production”, the administration wrote. “We must engage our partners to promote global resilience”.