Biden to order review of U.S. reliance on overseas supply chains for semiconductors, rare earths


President Joe Biden will direct his administration to conduct a review of key U.S. supply chains together with semiconductors, high-capacity batteries, medical provides and rare earth metals.

The evaluation, which might be led by members of each Biden’s financial and nationwide safety groups, will analyze the “resiliency and capacity of the American manufacturing supply chains and defense industrial base to support national security [and] emergency preparedness,” in accordance to a draft of an government order seen by CNBC.

The textual content of the chief order is being finalized and the last word language might range from the present draft.

The White Housel plans to review gaps in home manufacturing and supply chains which might be dominated by or run by way of “nations that are or are likely to become unfriendly or unstable.”

Though the order doesn’t point out China, the directive is probably going largely an effort by the administration to decide how reliant the U.S. financial system and army are on a essential group of Chinese exports. Biden stated earlier this month that his White House is gearing up for “extreme competition” with China.

President Joe Biden delivers remarks on the state of the U.S. financial system and the necessity to go coronavirus illness (COVID-19) support laws throughout a speech within the State Dining Room on the White House in Washington, U.S., February 5, 2021.

Kevin Lemarque | Reuters

The pending government order is one of the administration’s first tangible efforts to consider and shore up American enterprise and protection pursuits by way of a radical review of the place, and from which nations, it receives key uncooked supplies.

The White House review will happen in two phases.

The first part will consist of a 100-day review course of throughout which officers will analyze and report on a handful of high-priority supply chains, together with semiconductor manufacturing and packaging, high-capacity and electrical automotive batteries, rare earth metals and medical provides.

The second part — starting after the precise, 100-day review — will broaden the administration’s investigation to numerous sectors, together with the manufacturing of gear for protection, public well being, power and transportation.

After these two are full, one yr after the order is issued, the duty power will submit suggestions to the president on potential actions, together with diplomatic agreements, trade-route edits or different methods to guarantee supply chains are usually not monopolized.

Some of the commodities and parts listed within the order included rare earth metals, a gaggle of minerals used within the manufacturing of a range of superior applied sciences, together with pc screens, state-of-the-art weapons and electrical automobiles.

The White House didn’t reply to CNBC’s request for remark.

Defense analysts and politicians on each side of the political aisle have in recent times highlighted U.S. dependence on China for rare earths as a possible strategic pitfall.

During a Senate Energy and Natural Resources Committee assembly final yr, Sen. Lisa Murkowski of Alaska requested panelist Simon Moores what would possibly occur if China determined to reduce off the U.S. from the minerals.

Moores, managing director at Benchmark Mineral Intelligence, stated that such a transfer would depart the U.S. with few choices and show devastating to the U.S. financial system.

“If lithium is anything to go by, China would stop short of weaponising rare earths (blocking exports to US) favouring the economic route of exporting its processing knowhow to new mines around the world,” Moores wrote on Twitter in 2019. “A far more savvy way to gain long term supply chain.”

This is breaking information. Please verify again for updates.



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