The US is still heavily dependent on other countries for manufacturing technology (including products), and President Biden is looking for ways to reduce that dependence. The LA Times has learned that Biden is ordering a review of U.S. semiconductor supply chains, high-capacity batteries and rare earth minerals to ensure reliable access to these elements. Although the effort was not explicitly focused on China, unnamed officials Times the US was “too dependent” on that country.
According to officials, this is not just a superficial report, according to officials. The aim is to create ‘gaps’ and create ‘diverse and resilient’ supply chains.
The Biden administration confirmed these plans shortly after this story was published. To begin with, the government ordered an “immediate 100-day review of federal agencies to address vulnerabilities in the supply chains of four key products.” The executive order also calls for a year-long investigation into a “broader range of U.S. supply chains.” The review will focus on six sectors: “the industrial base for defense; the industrial base for public health and biological preparedness; the industrial base for information and communication technology (ICT); the industrial base for the energy sector; the industrial base for transportation; and supply chains for agricultural commodities and food production. “
If there are any changes, it could pay close attention to issues that are currently plaguing the US industry. Car manufacturers, for example, are struggling with disk shortages as demand bounces back. A more diverse supply chain could reduce the bottlenecks and help U.S. businesses (plus those that depend on them) thrive. This can be especially important because Biden hopes to spur sales of electric cars and otherwise help the US claim or maintain its technological advantages.
Whether the review will help is not clear. Although companies like Apple may move production to Vietnam and otherwise limit their dependence on China, it is not as simple as cutting ties. Manufacturing usually takes place conveniently in China – a company can get rare earths, components and final assembly in one place rather than having to send it abroad. Biden may succeed in taking some companies down from Chinese production, but there may be many companies that do not have much choice.
Update, 13:20 ET: Details added on the confirmation of the Biden administration of these plans.