Biden Administration Strikes to Unkink Provide Chain Bottlenecks

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WASHINGTON – The Biden government planned on Tuesday to issue a series of measures and recommendations to address supply chain disruptions caused by the coronavirus pandemic and reduce reliance on other countries for essential goods by increasing domestic manufacturing capacity.

In a phone call Monday night detailing the plan for reporters, White House officials said the government had set up a task force to address “short-term bottlenecks” in construction, transportation, semiconductor manufacturing and agriculture.

Officials also outlined steps taken to comply with an executive order by President Biden that required a review of critical supply chains in four product areas in which the United States relies on imports: semiconductors, high-capacity batteries, pharmaceuticals and their active ingredients, and critical minerals and strategic materials, such as rare earths.

“This is about making sure the United States can meet every challenge we face in the new era,” said Biden in February when the contract was signed.

The review was government-wide, officials said: Cabinet members were instructed to report to the White House within 100 days. The move should address concerns about supply chain resilience and long-term competition with China.

The Department of Health and Welfare, for example, will use $ 60 million from the $ 1.9 trillion Coronavirus Relief Act to develop technologies to increase domestic production of active ingredients in key pharmaceuticals. The Department of the Interior will work to identify locations where critical minerals could be produced in the United States. And several agencies will work to create supply chains for new technologies that will reduce reliance on imports of key materials.

The Biden government also signaled that it was ready to use trade policies to bolster domestic supplies of vital minerals and components. As part of this effort, the US Trade Representative’s office announced the establishment of a so-called strike force that could propose action against foreign companies believed to be involved in unfair trade practices.

The Department of Commerce will consider investigating the worldwide trade in neodymium magnets under Section 232 of the Trade Expansion Act of 1962. The Trump administration implemented this law to impose tariffs on foreign steel and aluminum materials after it concluded that domestic production of these materials was essential to national security.

As part of his plans to fight climate change, Mr. Biden wants Americans to drive millions of new electric vehicles and get more energy from renewable sources like wind and solar. However, experts have long indicated that the transition to cleaner energy will require enormous supplies of critical minerals, many of which are currently being produced and processed abroad.

Most of the world’s lithium, a key component of the batteries that power electric vehicles, is mined in Australia, China, Chile and Argentina. China dominates the global production of rare earth minerals such as neodymium, which are used to make magnets in wind turbines. It has also largely cornered the lithium-ion battery market, which accounts for 77 percent of global battery cell manufacturing capacity and 80 percent of raw material refining, according to BloombergNEF, an energy research group.

The United States lags far behind other countries in producing many clean energy technologies and is therefore heavily dependent on imports.

The Biden government has promised to bring back more of this production and mining, but progress has been slow. In the United States, companies are racing to develop lithium reserves in states like Nevada and North Dakota, though these efforts are met with opposition due to their environmental impact. The country also has only one mine producing rare earth minerals in Mountain Pass, California.

As part of its announcement on Tuesday, the Biden administration said it would work to identify new inland locations where such critical minerals could be mined with environmental protection measures and urged Congress to increase funding for a mapping program at the U.S. Geological Survey .

The energy ministry announced that it would offer loans to companies that could sustainably refine, process and recycle rare earths and other materials used in electric vehicles. The agency will also release a plan to build a domestic lithium-ion battery supply chain on Tuesday.

The Department of Energy has $ 17.7 billion in loans under the Advanced Technology Vehicles Manufacturing Loan Program, which Congress launched in 2007 and used in 2010 to support electric vehicle maker Tesla in its early days. In its announcement, the agency announced that it would offer loans to manufacturers of advanced battery technology who were setting up factories in the United States. It also announced a new policy that future funding of new clean energy technologies would require recipients to “manufacture these products essentially in the United States.”

Semiconductors – a key component in automobiles and electronic devices – were also another important area of ​​research for civil servants, although they did not describe any immediate plans to increase production. A global semiconductor shortage has forced several American auto plants to shut down or reduce production and prompted the government to call on allies like Taiwan for emergency supplies. Instead, the 100-day report said Congress should support a $ 50 billion investment in domestic semiconductor manufacturing and research.

The results are in part a push for the president’s $ 1 trillion infrastructure plan, which could fund some research and professional training to get American workers into making advanced technologies like semiconductors.

Efforts come as the Senate stands ready to pass a huge industrial policy bill to counter China’s growing influence, a rare bipartisan development as lawmakers suddenly make huge investments in semiconductor manufacturing, artificial intelligence research, robotics, quantum computers, and a range other technologies.