President Joe Biden signed an Executive Order to help create more resilient and secure supply chains for critical and essential goods.
In recent years, American households, workers, and companies have increasingly felt the strain of shortages of essential products—from medicine to food to computer chips. Last year’s shortages of personal protective equipment (PPE) for front-line healthcare workers at the beginning of the COVID-19 pandemic were unacceptable. Recent shortages of automotive semiconductor chips have forced slowdowns at car manufacturing plants, highlighting how shortages can hurt U.S. workers.
While we cannot predict what crisis will hit us, we should have the capacity to respond quickly in the face of challenges. The United States must ensure that production shortages, trade disruptions, natural disasters and potential actions by foreign competitors and adversaries never leave the United States vulnerable again. Today’s action delivers on the President’s campaign commitment to direct his Administration to comprehensively address supply chain risks. The task of making our supply chains more secure can also be a source of well paid jobs for communities across our country, including in communities of color, and steps will be taken to ensure that the benefits of this work flow to all Americans.
The Executive Order launches a comprehensive review of U.S. supply chains and directs federal Departments and Agencies to identify ways to secure U.S. supply chains against a wide range of risks and vulnerabilities. Building resilient supply chains will protect the United States from facing shortages of critical products. It will also facilitate needed investments to maintain America’s competitive edge, and strengthen U.S. national security.
Here are President Biden’s remarks before the signing of the executive order:
The Vice President and I had a very productive meeting with a bipartisan group of senators and House members to address an issue of both concern to our economic security, as well as our national security: the resilience and reliability of our critical supply chains.
This is a critical area where Republicans and Democrats agreed it was one of the best meetings — it’s the best meeting I think we’ve had so far, although we’ve only been here about five weeks. But it was like the old days — people actually are on the same page.
Good, bipartisan work has already been done. The leaders of this operation in the House and Senate already have done great work, and I want to thank them for their leadership.
We’re here to build on that. And the bottom line is simple: The American people should never face shortages in the
goods and services they rely on, whether that’s their car or their prescription medicines or the food at the local grocery store.
And remember, the shortages in PPE during this pandemic –that meant we didn’t have the masks; we didn’t have gowns or gloves to protect our frontline health workers.
We heard horror stories of doctors and nurses wearing trash bags over their gown — over their dress in order to — so they wouldn’t be in trouble, because they had no gowns. And they were rewashing and reusing their masks over and over again in the OR.
That should never have never happened. And this will never happen again in the United States, period. We shouldn’t have to rely on a foreign country — especially one that doesn’t share our interests or our values — in order to protect and provide our people during a national emergency.
That’s why one of the first executive orders I signed, as some may remember, was to ensure that we’re manufacturing more
protective equipment for healthcare workers here at home.
And today, I’m shortly going to be signing another executive order that’ll help address the vulnerabilities in our supply chains across additional critical sectors of our economy so that the American people are prepared to withstand any crisis and rely on ourselves.
This is about making sure the United States can meet every challenge we face in this new era — pandemics, but also in defense, cybersecurity, climate change, and so much more. And the best way to do that is by protecting and sharpening America’s competitive edge by investing here at home. As I’ve said from the beginning, while I was running: We’re going to invest in America. We’re going to invest in American workers. And then we can be in a much better position to even compete beyond what we’re doing now.
Resilient, diverse, and secure supply chains are going to help revitalize our domestic manufacturing capacity and create good-paying jobs, not $15 an hour — which is what we need to do someday. And sooner is better, in my view. But jobs that are at the prevailing wage.
We’re going to spare new — spur new opportunities for small businesses, communities of color, and economically distressed areas. And I will drive new investment in research and innovation and our workforce, investing in training and university partnerships that are going to lead to new technologies and new solutions.
And all this won’t just strengthen our domestic capacity, it will help unleash new markets around the world and grow opportunities for American businesses to export their goods that we’re going to be making.
These are the kinds of commonsense solutions that all Americans can get behind — workers and corporate leaders, Republicans and Democrats. It’s about resilience, identifying possible points of vulnerabilities in our supply chains, and making sure we have the backup alternatives or workarounds in place.
Remember that old proverb: “For want of a nail, the shoe was lost. For want of a shoe, the horse was lost.” And it goes on and on until the kingdom was lost, all for the want of a horseshoe nail. Even small failures at one point in the supply chain can cause outside impacts further up the chain.
Recently, we’ve seen how a shortage of computer chips — computer chips like the one I have here — you can hardly see it I imagine; it’s called a “semiconductor” — has caused delays in production of automobiles that has resulted in reduced hours for American workers. A 21st century horseshoe nail.
This semiconductor is smaller than a postage stamp, but it has more than 8 billion transistors — 8 billion transistors, 10,000 times thinner than a single human hair in this one chip. These chips are a wonder of innovation and design that powers so much of our country, enables so much of our modern lives to go on — not just our cars, but our smartphones, televisions, radios, medical diagnostic equipment, and so much more.
We need to make sure these supply chains are secure and reliable. I’m directing senior officials in my administration to work with industrial leaders to identify solutions to this semiconductor shortfall and work very hard with the House and Senate. They’ve authorized the bill, but they need (inaudible) $37 billion, short term, to make sure we have this capacity. We’ll push for that as well. But we all recognize that the particular problem won’t be solved immediately.
In the meantime, we’re reaching out to our allies, semiconductor companies, and others in the supply chain to ramp up production to help us resolve the bottlenecks we face now. We need help to stop — we need to stop playing catch up after the supply-chain crisis hit. We need to prevent the supply chain crisis from hitting in the first place.
And in some cases, building resilience will mean increasing our production of certain types of elements here at home. In others, it’ll mean working more closely with our trusted friends and partners, nations that share our values, so that our supply chains can’t be used against us as leverage.
It will mean identifying and building surge capacity that can quickly be turned into and ramped up production in times of emergency. And it will mean investing in research and development, like we did in the ’60s, to ensure long-term competi- — competitiveness in our manufacturing base in the decades ahead.
The order I’m about to sign does two things. First, it orders a 100-day review of four vital products: semiconductors — one; key minerals and materials, like rare earths, that are used to make everything from harder steel to airplanes; three, pharmaceuticals and their ingredients; four, advanced batteries, like the ones used in electric vehicles.
There’s strong bipartisan support for fast reviews of these four areas because they’re essential to protecting and strengthening American competitiveness.
Second, this order initiates a long-term review of the industry basis of six sectors of our overall economy over the next year. These reviews will identify policy recommendations to fortify our supply chains at every step, and critically, to start implementing those recommendations right away. We’re not going to wait for a review to be completed before we start closing the existing gaps.
And as we implement this work, my administration will draw on a full range of American talent — including labor and industry leaders, policy experts, scientists, farmers, engineers — to get their input.
I’m grateful for the members of Congress who came to see me — Republican leaders, as well as Democrats. They’re leading the way. We’re going to stay in close contact with members of both sides of the aisle and keep advancing our shared goals.
Everyone has a role to play to strengthen our supply chains in our — and our country. This is the United States of America. We are better prepared to meet the challenges of the 21st century than any country in the world. There’s nothing, nothing, nothing we’ve ever failed to achieve if we work together. And that’s what we decided to do today, and that’s what we’re going to do: work together.
So I thank you all. I’m very optimistic about the meeting we had today with our congressional colleagues. And now I’m going to walk over and sign that executive order.
(The executive order is signed.)
Securing America’s Critical Supply Chains
First, the order directs an immediate 100-day review across federal agencies to address vulnerabilities in the supply chains of four key products.
- Pharmaceuticals and active pharmaceutical agreements (APIs). APIs are the part of a pharmaceutical product that contains the active drug. In recent decades, more than 70 percent of API production facilitators supplying the U.S. have moved offshore. This work will complement the ongoing work to secure supply chains needed to combat the COVID-19 pandemic.
- Critical minerals, including rare earths. Critical minerals are an essential part of defense, high-tech, and other products. From rare earths in our electric motors and generators to the carbon fiber used for airplanes—the United States needs to ensure we are not dependent upon foreign sources or single points of failure in times of national emergency.
- Semiconductors and Advanced Packaging. The United States is the birthplace of this technology, and has always been a leader in semiconductor development. However, over the years we have underinvested in production—hurting our innovative edge—while other countries have learned from our example and increased their investments in the industry.
- Large capacity batteries, such as those used in electric vehicles: As we take action to tackle the climate crisis, we know that will lead to large demand for new energy technologies like electric vehicle batteries. By identifying supply chain risks, we can meet the President’s commitment to accelerate U.S. leadership of clean energy technologies. For example, while the U.S. is a net exporter of electric vehicles, we are not a leader in the supply chain associated with electric battery production. The U.S. could better leverage our sizeable lithium reserves and manufacturing know-how to expand domestic battery production.
The 100-day review will identify near term steps the administration can take, including with Congress, to address vulnerabilities in the supply chains for these critical goods.
Second, the order calls for a more in-depth one-year review of a broader set of U.S. supply chains. The one-year review will include:
- A focus on six key sectors: the defense industrial base; the public health and biological preparedness industrial base; the information and communications technology (ICT) industrial base; the energy sector 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 are directed to review a variety of risks to supply chains and industrial bases. For example, 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 resiliency: Agencies are directed to make specific policy recommendations to address risks, as well as proposals for new research and development activities.
- A sustained commitment to supply chain resiliency: 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. directs 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. President Biden has also directed his Administration to work with U.S. partners and allies to ensure that they too have strong and resilient supply chains.
President Biden has directed his Administration to ensure that the task of building resilient supply chains draws on the talent and work ethic of communities across America, including communities of color and cities and towns that have for too long suffered from job losses and industrial decline. As the Administration implements the Executive Order, it will identify opportunities to implement policies to secure supply chains that grow the American economy, increase wages, benefit small businesses and historically disadvantaged communities, strengthen pandemic and biopreparedness, support the fight against global climate change, and maintain America’s technological leadership in key sectors.