President Joe Biden will instruct his government to conduct a review of major U.S. supply chains, including semiconductors, high-capacity batteries, medical supplies and rare earth metals.
The assessment, which will be conducted by members of Biden’s national economic and security teams, will analyze the “resilience and capacity of the American manufacturing supply chains and defense industrial base to support national security. [and] emergency preparedness “, according to an executive order project seen by CNBC.
The executive order text is being finalized and the final wording may differ from the current version.
White Housel plans to address gaps in domestic manufacturing and supply chains that are dominated or crossed by “nations that are or are likely to become hostile or unstable”.
Although the order does not mention China, the guideline is probably largely a government effort to determine how much the US economy and military depend on a critical group of Chinese exports. Biden said earlier this month that his White House is preparing for “extreme competition” with China.
The pending executive order is one of the government’s first tangible efforts to assess and sustain American business and defense interests through a thorough review of where it receives key raw materials.
President Joe Biden comments on the state of the US economy and the need to pass legislation to aid coronavirus disease (COVID-19) during a speech at the State Dining Room at the White House in Washington, USA, on February 5, 2021.
Kevin Lemarque | Reuters
The White House review will take place in two phases.
The first will consist of a 100-day review process during which employees will analyze and report on a handful of high-priority supply chains, including semiconductor manufacturing and packaging, high-capacity electric car batteries, rare earth metals and medical supplies.
The second phase – started after the specific 100-day review – will expand the government’s investigation to several sectors, including the production of defense equipment, public health, energy and transport.
After these two are completed, a year after the order is issued, the task force will make recommendations to the president on potential actions, including diplomatic agreements, trade route edits, or other ways to ensure that supply chains are not monopolized.
Some of the goods and components listed in the order include rare earth metals, a group of minerals used in the production of a variety of advanced technologies, including computer screens, state-of-the-art weapons and electric vehicles.
The White House did not respond to CNBC’s request for comment.
Defense analysts and politicians on both sides of the political corridor have in recent years highlighted the US reliance on China for rare earths as a potential strategic trap.
During a meeting of the Senate Energy and Natural Resources Committee last year, Alaska Senator Lisa Murkowski asked speaker Simon Moores what could happen if China decided to cut the United States off minerals.
Moores, managing director of Benchmark Mineral Intelligence, said that such a move would leave the US with few options and would be devastating for the American economy.
“If lithium were anything to follow, China would not have rare earth weapons as a weapon (blocking exports to the United States), favoring the economic route of exporting its processing knowledge to new mines around the world,” wrote Moores on Twitter in 2019. smarter way to get a long-term supply chain. “
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