President Joe Biden will lead his administration to review key U.S. supply chains, including those for semiconductors, high-capacity batteries, medical supplies and rare earth metals.
The assessment, which will be led by members of Biden’s economic and national security teams, will examine the “sustainability and potential of America’s manufacturing supply chains and the defense industry base to support national security. [and] emergency preparation, “according to a draft regulatory order seen by CNBC.
The text of the command is finalized and the final language may differ from the current version.
The White House intends to review gaps in domestic production and supply chains that are controlled or run through “nations that are or are likely to be friendly or unstable. “
While the order does not mention China, the directive is largely the result of an administration effort to determine the reliability of the U.S. economy and arms to an emergency group of Chinese exporters. Earlier this month, Biden said his White House was preparing for a “real rivalry” with China.
The forthcoming regulatory order is one of the administration’s first substantive efforts to assess and dig into America’s industrial and defense interests through a thorough review of where key raw materials come from.
President Joe Biden will deliver views on the state of the U.S. economy and the need for coronavirus disease aid (COVID-19) legislation at a speech in the State Dining Room of the White House in Washington, USA, February 5, 2021.
Kevin Lemarque | Reuters
The White House review will take place in two stages.
The first will involve a 100-day review process, in which officials will analyze and report on a handful of high-priority supply chains, including those for manufacturing and packaging of semiconductors, high-capacity car and electric batteries, rare earth metals and medical supplies.
The second phase – starting after the special, 100-day study – will extend the administration’s review to various departments, including the manufacture of equipment for defense, public health, energy and transportation.
Upon completion of these two, one year after the order is issued, the task force shall send recommendations to the president on possible actions, including diplomatic agreements, route preparations. trade or other means to ensure that supply chains are not regulated.
The White House did not respond to CNBC’s request for comment.
In recent years defense analysts and politicians on both sides of the political corridor have denounced U.S. dependence on China for rare earth metals – a group of minerals used in the manufacture of advanced technologies , including computer screens, modern weapons and electric vehicles – as a strategic problem.
At a meeting of the Senate Energy and Natural Resources Committee last year, Sen. Lisa Murkowski, R-Alaska, asked panelist Simon Moores what could happen if China decides to cut the U.S. from the minerals.
Moores, managing director at Benchmark Mineral Intelligence, said such a move would leave the U.S. with few options and would be devastating to the U.S. economy.
“If lithium is anything that could go wrong, China would stop disarming rare earths (exporting to the US) sidelining the economic path from extending their processing method to new mines around the world, “Moores wrote on Twitter in 2019.” Much safer way to get a long-term supply chain. “