- The executive order signed by President Biden includes in the review intents to boost manufacturing jobs by strengthening U.S. supply chains for these and other goods.
- Before the signing, President Biden met with US lawmakers to give the initiative a bipartisan slant.
- The lack of chips has already cost the global automotive industry the production of around one million vehicles.
American President Joe Biden ordered an urgent overhaul of the supply chains for semiconductor chips, advanced batteries, pharmaceuticals, critical minerals, and other strategic products. The lack of these things is causing damage to the country’s industry.
The executive order signed by President Biden includes in the review— with a term of 100 days— intents to boost manufacturing jobs by strengthening U.S. supply chains for these and other goods.
At a ceremony at the White House, President Biden said:
These are the kinds of commonsense solutions that all Americans can get behind — workers and corporate leaders, Republicans and Democrats. It’s about resilience, identifying possible points of vulnerabilities in our supply chains, and making sure we have the backup alternatives or workarounds in place.
To meet those needs, the order contemplates both an increase in domestic production, as well as an articulation with international partners to ensure a stable and reliable supply chain.
Before the signing, President Biden met with US lawmakers to give the initiative a bipartisan slant.
“This is a critical area where Republicans and Democrats agreed— it was one of the best meetings I think we’ve had so far and we’ve only been here about five weeks,” President Biden said. “It was like the old days. People were actually on the same page.”
Sen. John Cornyn (R-TX), who was one of those who attended the meeting, later on stated that President Biden was very receptive during the conversation.
“He said, ‘we’re all in,’” Cornyn said. “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 cell phones.”
Sen. Charles Schumer (D-NY), leader of the Democratic majority in the Senate, argued that an emergency investment should be considered to strengthen the chip production capacity in the United States. This signaled that support for President Biden’s order could extend to a wide package of measures.
The order provides for sectoral revisions, with a term of one year, for Defense, Public Health, Biological Response Capacity, Information and Communication Technologies, Energy, Transport and Food Production.
After the COVID-19 pandemic left the United States short of masks, gloves, and other hospital protective equipment, American car manufacturers are now struggling with a lack of chips. Like their European counterparts, this prevents them from producing to a normal capacity.
According to the consultancy IHS Markit, the lack of chips has already cost the global automotive industry the production of around one million vehicles. The situation is expected to continue to worsen until the end of March, maintaining the needs until the third quarter. Ford, General Motors and Tesla are among the car manufacturers most affected.
China, the world’s largest manufacturer of mobile phones, televisions and computers, is currently the world’s largest consumer of chips, absorbing more than half of the world’s production, according to a recent study by the Peterson Institute for International Economics.