On June 8, 2021, the Biden-Harris Administration in the United States released a comprehensive report titled Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-Based Growth in response to the 100-day review mandated by February 24, 2021, Executive Order on America’s Supply Chains (EO 14017). The report’s purpose is to analyze the best methods for strengthening American supply chains to promote greater economic resilience, bolster national security, and support the creation of higher-paying domestic jobs connected to the manufacturing sector.
EO 14017 was rendered to counter supply chain fragility across four distinctive areas:
- To counter the effects of the global pandemic, the Biden-Harris COVID-19 Response Team worked through private and public partnerships to expand the manufacture and delivery of vaccines and other essential medical supplies to accelerate the ability for 137 million Americans to become fully vaccinated.
- To remedy the effects of the global semiconductor chip shortage, the Biden-Harris Administration sought to develop a more holistic view of the supply chain management dynamics connected to the sourcing, production, and distribution of that key component connected to the success of so many American industries.
- The American Department of Defense (DOD) announced strategic investments to expand the largest rare earth element mining and processing operation outside of China to enhance American competitive advantage.
- The Biden-Harris Administration is working to resolve critical cyber supply chain vulnerabilities to secure America’s digital infrastructure.
The report was organized to enhance American production of the following critical product categories:
- medical supplies, pharmaceuticals, and active pharmaceutical ingredient (API) components
- large-capacity energy storage systems and batteries
- semiconductor chips and advanced packaging solutions
- rare earth minerals, elements, and materials
In this article, learn how the Biden-Harris Administration is working to strengthen American supply chains for production materials needed to manufacture critical products.
Key Findings from the 100-Day American Supply Chain Assessment Conducted in Response to EO 14017
The Biden-Harris report outlines various critical risks and vulnerabilities identified in American supply chains for four categories of critical products. This assessment was conducted as part of a wide-reaching collaboration between the United States’ Departments of Transportation, Agriculture, Commerce, Homeland Security, Defense, Energy, and Health and Human Services. The goal was to generate new evidence-based strategies for revitalizing six critical American industrial bases:
- Medical, pharmaceutical, public health production, and biological preparedness
- Information and communications technology infrastructure
- Agriculture and food production
Medical Supplies, Pharmaceuticals, and APIs
The global pandemic has reinforced the necessity to strengthen the resilience of the manufacturing sector connected to producing vital medical products needed by healthcare and public health service providers. Currently, the United States depends on imports for many essential pharmaceutical products and the advanced pharmaceutical ingredients (API) required to produce medicines domestically. The 100-day assessment shows that approximately 87% of API production happens away from the United States. That dramatically limits the ability of American firms to produce generic drugs, vaccines, and other essential medical supplies during a time of great hardship and crisis.
Nations like China and India control major parts of the medical and pharmaceutical production supply chain. Product shortages have been recorded as a direct consequence of supply chain disruptions and quality and safety issues arising during the pandemic. The report cites the pursuit of lower drug costs and unfair trade policies from the difference in international regulations as key underlying factors driving the challenges further exacerbated by the disruptions caused by the pandemic.
In July 2021, the American Food and Drug Administration (FDA) released a report to Congress highlighting that, at that time, over 130 of the most essential and critical medicines are unavailable in the United States because of these supply chain disruptions. At this time, new methods and strategies must occur to bolster the medical and pharmaceutical supply chain to improve transparency, build more robust emergency capacities, and complete strategic investments to support the expansion of U.S. domestic production capabilities.
Semiconductor chips are essential production components in nearly every type of modern consumer electronic device imaginable. They’re needed to produce everything from computers to mobile phones, dishwashers to cars, and mission-critical technologies connected to national security and defense. The United States was the original center of innovation for producing semiconductors. However, it has dropped from 37% of global production capacity to 12% in recent years.
Currently, the most advanced microchips production is centered in Asia, with the United States relying heavily on production sites in Taiwan, which produces 92% of all the chips used domestically. Reliance on the import of semiconductors has weakened American economic resilience. The U.S. can only produce between six and nine percent of the world’s most advanced mature logic chips.
Addressing these issues involves making investments to expand American semiconductor production and research and development capabilities dramatically. This strategy requires capital investments in production sites and strengthening the skilled workers’ pipeline to secure a competitive advantage across this sector. Additionally, the United States must work with allies to promote efforts that foster greater resilience across the global semiconductor supply chain.
Large-Capacity Energy Storage Systems and Batteries
The world’s most advanced batteries are needed to support shifting toward a more sustainable and clean energy transition. However, batteries also play an essential role in enhancing American national security and defense capabilities. Expansion of the electric vehicle industry depends on overcoming challenges posed by supply chain fragility, geopolitical strife, and economic competition. America relies heavily on imports of components and materials needed to produce advanced energy storage systems and batteries.
Experts predict that the global lithium-ion battery market could grow by a factor of 5 to 10 by 2030. As a result, the United States government believes it’s essential to support domestic competitive advantage to scale up a diversified supply chain for high-capacity batteries to generate high-paying jobs.
Rare Earth Elements, Minerals, and Materials
Currently, China has secured a competitive advantage in the value chains connected to mining and refining several critical minerals and materials essential to U.S. national and economic security. China has secured its position through the use of state-led, non-market interventions. As a result, America must strengthen rare earth mineral supply chains in response. However, we must note that, even if mining expands, America could still depend on China for refinement processes because of China’s control of refinement.
To respond to these challenges, the Biden-Harris Administration believes the U.S. must complete strategic investments to expand sustainable mining, production, recycling, and refinement capabilities while remaining committed to environmentalism and social justice topics.
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