The United States still relies heavily on other countries for technology manufacturing (among other products), and President Biden is looking for ways to reduce that dependence. the LA Times it learned that Biden is ordering a review of US supply chains for semiconductors, “high-capacity” batteries and rare earth minerals to ensure reliable access to those elements. While the effort is not explicitly focused on China, anonymous officials told the Times The United States was “too dependent” on that country.
This is not just a superficial report, according to officials, the goal is to “close gaps” and create “diverse and resilient” supply chains.
The Biden administration confirmed these plans shortly after this story was published. To begin with, the administration ordered an “immediate 100-day review across all 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 set of US supply chains.” The review will focus on six sectors: “the defense industrial base; the public health and biological preparation industrial base; the information and communications technology (ICT) industrial base; the energy sector industrial base; the industrial base transportation; and supply chains for agriculture commodities and food production. “
If there are any changes, they could go a long way toward addressing the issues currently plaguing American industry. Automakers, for example, are grappling with chip shortages as demand recovers. A more diverse supply chain could reduce those bottlenecks and help US companies (and those that depend on them) prosper. That may be particularly important, as Biden hopes to stimulate electric car sales and help the United States reclaim or maintain its technological advantages.
It is unclear whether the review will help or not. Although companies like Apple can move production to Vietnam and limit their dependence on China, it is not as simple as cutting ties. Manufacturing is often done in China because of convenience – a company can source rare earths, components, and final assembly in one place instead of having to ship them overseas. Biden might be successful in diverting some companies from Chinese production, but there may be many companies that don’t have many options.
Update, 1:20 pm ET: Details were added about the confirmation of these plans by Biden’s management.