Fri | Jun 18, 2021

Biden to launch task force on bottlenecks in supply chains

Published:Wednesday | June 9, 2021 | 12:06 AM
United States President Joe Biden.
United States President Joe Biden.

The Biden administration has completed a 100-day review of supply chains and will form a task force to address the bottlenecks in the semiconductor, construction, transportation and agriculture sectors.

Administration officials said their goal is to increase domestic manufacturing, limit shortages of vital goods and reduce a dependence on geopolitical competitors such as China. The officials, speaking before the 250-page review was released Tuesday, noted that the goal is to get ahead of crises such as the computer chip shortage that has hurt automakers this year.

“More secure and resilient supply chains are essential to our national security, our economic security, and our technological leadership,” the report said, noting how the coronavirus pandemic and subsequent economic turmoil exposed United States supply chain vulnerabilities, like when soaring demand for medical products wreaked havoc on the healthcare system.

A shortage of raw materials has made it harder for the US economy to recover from the pandemic-induced recession. The supply bottleneck has helped fuel a bout of inflation that the administration believes will be temporary, though it has provided Republican lawmakers and some economists with grounds for criticising Biden’s US$1.9-trillion coronavirus relief package.

The new task force will be led by the secretaries of Commerce, Agriculture and Transportation to focus on parts of the economy where there is a mismatch between supply and demand.

Besides the task force, the administration will take several other steps to bolster supply chains, with an effort spread across the government.

The Department of Health and Human Services will use the Defense Production Act to create a public-private partnership for manufacturing essential pharmaceutical drugs. It will also commit US$60 million to increase the production of pharmaceutical ingredients.

The Energy Department will release a blueprint to develop supplies for lithium batteries, in addition to providing roughly US$17 billion in loans for advanced batteries that would help shift the country to electric vehicles.

The Interior Department will create a working group to determine where critical minerals can be produced and processed in the United States. The Commerce Department plans to increase cooperation and investments within the semiconductor industry, while the Labor Department will announce US$100 million in grants for state-led apprenticeship programmes.

The US Trade Representative will lead a strike force to target foreign competitors with unfair practices that have eroded supply chains. The Agriculture Department will spend more than US$4 billion to strengthen the supply chain for food.