Joe Biden has set out to tackle shortages of “essential” goods affecting critical industries in the United States, starting with the struggling auto sector, due to the global semiconductor crisis.
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The US president on Wednesday signed an executive order to scrutinize the supply chains of goods deemed “essential” ranging from semiconductors – these essential chips for the manufacture of cars, mobile phones or smart speakers – to products pharmaceuticals, through critical minerals including rare earths, these metals essential to advanced technologies found in smartphones or plasma screens.
“We need to make supply chains safer and more reliable,” said Joe Biden, stressing that no American, for example, should endure drug shortages.
According to him, this could mean “by increasing the production of certain elements” in the United States.
The Biden administration, which wants to reduce the dependence of the United States on the outside, does not name any country in particular, but seems to target China, which produces most of the rare earths.
This measure follows in the wake of other decrees signed to promote the growth of the American manufacturing industry.
“Unacceptable” shortages of personal protective equipment had affected workers in the health sector last year, yet on the front line in the face of the COVID-19 pandemic, recalled Joe Biden.
“It’s about ensuring that the United States can meet all the challenges it faces in this new era of pandemic, but also in the area of cybersecurity, defense, climate change and much more. », He commented.
“And the best way to do that is to protect and strengthen America’s competitive advantage,” he added, insisting that his administration was going to “invest in America”.
The Biden administration also acknowledges that recent semiconductor shortages are translating into downturns in car manufacturing plants, which it says underlines “how shortages can hurt American workers.”
General Motors and Ford have had to suspend production at several of their factories, and warned that it is expected to cost them several billion dollars.
According to Arthur Wheaton, a professor at Cornell University, the risk is that shortages will hit the defense industry, while the auto semiconductor crisis could spill over to other economic sectors.
Concretely, the executive order will help launch “a comprehensive review of US supply chains and direct federal departments and agencies to identify ways to secure US supply chains against a wide range of risks and vulnerabilities,” according to the document detailing the measures.
The decree provides for two stages.
First, within 100 days, four key products will be reviewed: pharmaceuticals, critical minerals including rare earths, semiconductors and large capacity batteries like those used in electric cars.
Then, during a one-year review, the administration will tackle six key sectors: basic defense industry, public health, technological information and communication, energy, transport, and agricultural and food supply chains.
In other words, it might take a while. In addition, the Biden administration has not advanced any possible costs if it decides to repatriate the production of certain essential goods.
The administration of Donald Trump had tried to guarantee the supply of the United States with strategic minerals essential for all electronic equipment, to which China had threatened to restrict access in the context of the trade war between the two countries. .
In June 2019, it unveiled an action plan identifying 35 strategic elements, including uranium, titanium and rare earths, for which the United States is particularly dependent on foreign countries.
In a report, the Trump administration recalled that for 14 of the 35 materials reviewed, imports represent more than 50% of annual consumption in the United States.
The implementation of the Biden decree should help “maintain American technological leadership in key sectors”, assures the White House without specifying how to achieve it.