US supply chain review ordered as Biden seeks to prevent shortages

Domestic production vulnerabilities to be assessed in move deemed rebuke to China

US president Joe Biden: wants to address vulnerabilities in  semiconductors, electric vehicle batteries, rare earth materials and pharmaceuticals. Photograph:  Saul Loeb

US president Joe Biden: wants to address vulnerabilities in semiconductors, electric vehicle batteries, rare earth materials and pharmaceuticals. Photograph: Saul Loeb

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US president Joe Biden ordered a review of America’s supply chains on Wednesday – a sign that the new administration intends to continue some of the “America First” trade and manufacturing policies of the Trump presidency.

The president signed an executive order requiring federal agencies to begin a 100-day review of supply chains to address vulnerabilities in four product areas – semiconductors; electric vehicle batteries; rare earth materials that are used in high-tech and defence products; and pharmaceuticals.

The inclusion of pharmaceuticals and active pharmaceutical ingredients could potentially impact Ireland, a major exporter of pharma products to the United States, though Biden administration officials said no specific country was being targeted.

Ireland exported over €25 billion worth of medicinal and pharmaceutical products to the US last year.

In addition to the 100-day review, Mr Biden has also announced one-year reviews for six sectors – defence, public health, biological preparedness, IT, transportation, and energy and food production.

Speaking in the White House, Mr Biden said that the American people “should never face shortages in the goods and services they rely on, whether that’s their car, prescription medicines or the food in the local grocery store”.

Earlier in the day, he hosted a group of Republican and Democrat members of Congress to discuss the issue – an indication of the level of cross-party support for strengthening America’s supply chains.

Semiconductor manufacturing

The signing of the order, though well-flagged by Mr Biden during the presidential campaign, is being perceived as a rebuke to China.

In particular, there is growing concern about the shortage of semiconductors in the US and calls for America to expand its own semiconductor production to counter Chinese dominance in the field. Speaking after the White House meeting, Republican senator John Cornyn said that China was currently building 17 semiconductor fabrication manufacturing facilities, while the US was in the early stages of building just one.

Asked if Ireland’s pharmaceutical sector could be adversely affected by the policy in Washington, a spokesman for the American Chamber of Commerce in Ireland said that AmCham believed that global diversified supply chains were “best-placed to help businesses stay resilient.” But he added, “The reasons that incentivise companies to keep Irish operations as part of their supply chain remain strong: these include our track record for excellence, high standards and zero-defect production, which is why they are trusted to produce products here.”

Mr Biden’s focus on strengthening supplies chains on Wednesday took place as several of his cabinet nominees were confirmed by the Senate. Linda Thomas-Greenfield was sworn in as the US ambassador to the United Nations, while Tom Vilsack was confirmed as agriculture secretary, returning to the same role he held in the Obama administration.

Nomination issues

But Mr Biden’s pick to lead the office of management and budget appeared to be in further difficulty, as two senate committees postponed votes on advancing her nomination. Neera Tanden has been criticised for previous partisan tweets, and has lost the support of several key Republicans as well as Democrat senator Joe Manchin. Senate budget committee chair Bernie Sanders has also not committed to supporting her. But White House press secretary Jen Psaki continued to defend Mr Biden’s choice, stating the White House was reaching out to members of congress “to fight for her”. “There’s one nominee to lead the budget department. Her name is Neera Tanden,” she said, dismissing suggestions that other names are now being considered.

Mr Biden’s nominee to lead the interior department, Deb Haaland of New Mexico, has also faced tough questioning from senators over her record as a former environmental activist, though it looked like she would reach the 51-threshold needed to win senate approval.