Biden administration plans to strengthen vital provide chains

0
161

President Joe Biden (C) speaks during a tour of the Cuyahoga Community College Manufacturing Technology Center on May 27, 2021 in Cleveland, Ohio.

Nicholas Comb | AFP | Getty Images

WASHINGTON – The Biden administration will announce a series of steps on Tuesday aimed at strengthening critical U.S. supply chains, building domestic manufacturing capabilities for key products, and addressing existing vulnerabilities.

President Joe Biden ordered a 100-day interagency review of domestic supply chains in February.

The outcome of this review and the resulting policy recommendations will form a new, several hundred-page report, due to be published on Tuesday.

The report’s initial recommendations focus on four products that are critical to the US economy: high capacity lithium batteries, rare earth minerals, semiconductors, and active pharmaceutical ingredients.

  • Large capacity lithium batteries: The Department of Energy intends to release a 10-year plan to develop a domestic lithium battery supply chain capable of producing the batteries that power electric vehicles. The Advanced Technology Vehicle Agency loan program will distribute $ 17 billion to support new research and manufacturing efforts in the United States.
  • Rare earth minerals: The Department of the Interior will lead a task force to identify locations where critical minerals could be produced and processed in the United States, metals used in cell phones, automobiles, and magnets, while meeting high environmental standards.
  • Semiconductor: As the nation grapples with a chip shortage that has shut down large auto factories, the White House said it will work with the private sector to increase supply chain visibility.
  • Advanced pharmaceutical ingredients: The Department of Health and Human Services will use the powers granted under the Defense Production Act to allocate approximately $ 60 million to “Develop Novel Platform Technologies to Increase Domestic Production Capacities for APIs.”

In addition to these steps aimed at increasing supplies of certain products, the government also announced several broader initiatives.

To help train the workers needed to fill these new projects, the White House will announce an additional $ 100 million in grants to support government-led efforts to expand apprenticeship training. The grants are administered by the Ministry of Labor.

The Department of Energy will announce a new policy requiring recipients of DOE research and development grants to “manufacture these products essentially in the United States.”

In addition to these efforts to strengthen domestic supply chains, the Biden government will also announce new steps to combat “unfair foreign trade practices” which it believes have contributed to the erosion of supply chains around the world.

One of these will be the creation of a “trade strike force” led by the US Trade Representative’s office. The strike forces will aim to identify “unilateral and multilateral” enforcement measures that the United States can take to punish countries it believes are engaging in unfair trade practices. According to a senior administrative official, the strike force will focus on developing trade policy between the US and China.

The other enforcement-related action will be a Department of Commerce-led assessment of whether to initiate an investigation into neodymium magnets under Section 232 of the Trade Expansion Act.

The rare earth magnets are used in motors and electronics by civilians and the military. Should the investigation come to the conclusion that US national security is threatened by foreign neodymium shipments, this could open the door to import restrictions or tariffs.

Then-President Donald Trump invoked Section 232 twice, citing it as his justification for the imposition of broad steel and aluminum tariffs. These tariffs are still in place and Biden has not said whether he will lift them.

A senior administration official who briefed reporters on condition of anonymity stressed that Biden’s trade policies are fundamentally different from Trump’s trade wars because they are carefully targeted.

“We do not want to wage trade wars with our allies and partners,” said the official. “We’re looking for very targeted products that we believe have powerful tools we could use to strengthen our own supply chains and reduce vulnerabilities.”