Since the COVID-19 pandemic began, supply chain security has become a pressing issue for manufacturers across the globe. Disruptions to supply chains, especially those based in China, were a major contributor to the production delays and setbacks experienced early in the pandemic. As new potential supply problems arise, the Biden administration has issued a directive to review American supply chains.
President Biden has formally ordered a 100-day review of possible vulnerabilities in American supply chains, especially for critical components like computer components, medical equipment, electric vehicle batteries, and special minerals. The review comes as automakers in the U.S. struggle with the global semiconductor shortage, impacting their ability to keep production up. Additionally, the administration wants to avoid a repeat of the shortages of medical equipment, like masks and gloves, which came at the start of the Covid-19 pandemic.
The order, which has been anticipated, will also set into motion thorough, year-long studies into the supply needs of critical sectors such as defense, food production, public health, information technology, energy, and transportation. Officials said that while the order was not directly aimed at China, they do recognize that the reliance of the U.S. on “strategic competitor nations” will be among the risks that are evaluated.
China is a major supplier of drug ingredients, electronic components, and valuable minerals like rare-earth elements for the U.S., with the latter in particular being important for fighter jets, smartphones, and wind turbines. The Biden administration has stated before that they plan to look for ways to shore up domestic supply chains, which would create new jobs and opportunities for small businesses. They also would plan to work closely with American allies to shore up supply lines. However, making such a change after decades of globalization would be quite costly, and it has yet to be seen what this change will look like or if it will begin any time soon.