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Biden orders review of domestic supply chains amid shortages

President Joe Biden speaks on U.S. supply chains,

President Joe Biden speaks on U.S. supply chains, in the State Dining Room of the White House, Wednesday, in Washington, D.C. Credit: AP/Evan Vucci

WASHINGTON — President Joe Biden, citing the medical supply shortages that came into focus during the early days of the pandemic and microchip shortages currently hampering U.S. auto production, ordered his administration on Wednesday to launch a review of domestic supply chains with the aim of preventing future shortfalls.

Biden’s executive order directs a 100-day federal review into four key supply areas — pharmaceuticals, semiconductor chips, large-capacity batteries and rare earth minerals used for technology and defense purposes.

"The last year has shown some of the vulnerability we have with some of the supply chains, including the PPE we needed badly, but had to go abroad to get," Biden said during a meeting with a bipartisan group of lawmakers at the Oval Office.

Biden’s review comes as the U.S. auto industry struggles with shortages of microchips produced in the U.S. and abroad for American-made cars. The shortages have forced U.S. auto manufacturers, including Ford and General Motors, to scale back production of certain vehicles until more of the semiconductor chips become available.

The microchip shortages were spurred by the pandemic, when a dip in demand for personal vehicles, prompted manufacturers to scale back the production of microchips used for cars and instead ramp up production of semiconductor chips used for personal computers and other electronic devices which saw a surge in demand amid stay-at-home orders, according to the Semiconductor Industry Association.

Biden, signing the executive order at the White House, said his administration is reaching out to semiconductor companies and foreign allies "to help us resolve the bottlenecks we face now."

"We need to stop playing catch up," Biden said. "After the supply chain crisis hit, we need to prevent the same crisis from hitting in the first place."

Sen. John Cornyn (R-Texas), one of the lawmakers who met with Biden, told reporters after the meeting that swift action to address supply chain shortages was essential, noting that China is building 17 semiconductor manufacturing plants, while the U.S. is in the early stages of building a single facility in Arizona.

"We all understand this is important, not only to our economy, but to our national security, because these cutting edge, high-end semiconductors — they operate on everything from the F-35 fifth generation stealth fighter to our cellphones," Cornyn said about bipartisan support around the issue.

A bipartisan group of lawmakers have introduced legislation — the CHIPS for America Act — aimed at increasing U.S. semiconductor chip production. The bill calls for establishing a $10 billion federal grant program to encourage semiconductor manufacturers to invest in building plants in the U.S. instead of overseas. Cornyn told reporters the proposed legislation was a key focus of the Oval Office meeting.

Senate Majority Leader Chuck Schumer (D-N.Y.) this week also announced plans to have a bill on the Senate floor by "this spring" aimed at bolstering the country’s technology sector amid rising competition from China. Schumer on Tuesday said he was also looking at providing "emergency funding" to help boost semiconductor production.

Speaking at the White House daily press briefing, Peter Harrell, the senior director for international economics and competitiveness on the National Security Council, said the U.S. "should never face shortages of critical products in times of crisis."

"Our supply chain should not be vulnerable to manipulation by competitor nations," Harrell said, adding that the U.S. is "going to get out of the business of reacting to supply chain crises as they arise, and get into the business of preventing future supply chain problems."

Biden’s order also calls for a "one-year review of a broader set of U.S. supply chains" across six sectors: defense, health care, information technology, energy, transportation and agriculture.

Also Wednesday, the White House announced plans to distribute more than 25 million reusable masks to community health centers and food pantries across the country. The masks will be distributed to "vulnerable populations" from March to May.

"Any American that needs a mask will be able to walk into these health centers or food pantries and pick up a high-quality American-made mask that is consistent with CDC guidance," said White House press secretary Jen Psaki at Wednesday’s briefing. "This program is made possible through existing funding, and with this action, we're hoping to level the playing field giving vulnerable populations quality well, fitting masks."

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