President Biden has signed an Executive Order calling for an immediate 100-day review across federal agencies to address vulnerabilities in the supply chains of four key products, including large-capacity batteries such as those used in electric vehicles (EVs). The order also calls for a more in-depth one-year review of a broader set of U.S. supply chains, with a focus on the energy sector industrial base among others.
With actions being taken to tackle the climate crisis, there will be a large demand for new energy technologies like EV batteries in the future. By identifying supply chain risks, the United States can meet the president's goal to accelerate U.S. leadership of clean energy technologies.
While the United States is a net-exporter of EVs, it is not a leader in the supply chain associated with electric battery production. The nation can better leverage its sizable lithium reserves and manufacturing know-how to expand domestic battery production.
The 100-day review will identify near-term steps the administration can take with Congress to address vulnerabilities in the supply chains for these critical goods. The other key products under focus for the 100-day review are:
- Semiconductors: The United States has always been a leader in semiconductor development. However, over the years, the nation has underinvested in production, while other countries have learned from its example and increased their investments in the industry.
- APIs: In recent decades, more than 70% of API production facilitators supplying the United States have moved offshore. This work will complement the ongoing work to secure supply chains needed to combat the COVID-19 pandemic.
- Critical minerals: These are an essential part of defense and high-tech products. The United States needs to ensure it is not dependent upon foreign sources or single points of failure in times of national emergency.
The broader one-year review includes more energy. It involves:
- A focus on six key sectors: These include the energy sector industrial base, the defense industrial base, the public health and biological preparedness industrial base, the information and communications technology (ICT) industrial base, the transportation industrial base, and supply chains for agricultural commodities and food production.
- A set of risks for agencies to consider in their assessment of supply chain vulnerabilities: Agencies and departments have been directed to review a variety of risks to supply chains and industrial bases. These reviews must identify critical goods and materials within supply chains, the manufacturing or other capabilities needed to produce those materials, as well as a variety of vulnerabilities created by failure to develop domestic capabilities. Agencies and departments are also directed to identify locations of key manufacturing and production assets, the availability of substitutes or alternative sources for critical goods, the state of workforce skills and identified gaps for all sectors, and the role of transportation systems in supporting supply chains and industrial bases.
- Recommendations on actions that should be taken to improve resilience: Agencies are directed to make specific policy recommendations to address risks, as well as proposals for new research and development (R&D) activities.
- A sustained commitment to supply chain resilience: The government will commit to a regular, ongoing process of reviewing supply chain resilience, including a quadrennial review process.
- Consultation with external stakeholders: The government cannot secure supply chains on its own. It requires partnership and consultation with the American people. The E.O. has directed the administration to consult widely with outside stakeholders, such as those in industry, academia, non-governmental organizations, communities, labor unions, and state, local, territorial, and tribal governments.
The E.O. will build on bipartisan Congressional action and leadership on this issue, and the administration will remain in close touch with Congress to solicit recommendations during the review.
In recent years, American households, workers, and companies have increasingly felt the strain of shortages of essential products. Building resilient supply chains will protect the United States from facing such shortages. It will also facilitate needed investments to maintain America's competitive edge and strengthen U.S. national security. Biden has directed his administration to work with U.S. partners and allies to ensure that they too have strong and resilient supply chains.
