On February 24, 2021, President Joseph Biden signed an executive order seeking “to create more resilient and secure supply chains for critical and essential goods.” Noting shortages over the past year of medicine, food and computer chips, the president stated that, “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.” The executive order directs federal government departments and agencies to initiate a review of U.S. supply chains and identify ways to secure U.S. supply chains against a range of risks and vulnerabilities.
The executive order directs an immediate 100-day review across all federal agencies to address vulnerabilities in the supply chains of four key products:
- Active pharmaceutical ingredients (APIs), which are the part of a pharmaceutical product containing the active drug.
- Critical minerals, which are part of defense, high-tech, and other products used for national defense and emergencies.
- Semiconductors and advanced packaging, which are necessary for innovation and technological advances.
- Large capacity batteries, which are necessary for new energy technologies like electric vehicle batteries.
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.”
The executive order also directs a one-year review of a broader set of U.S. supply chains, including: (1) the defense industrial base; (2) the public health and biological preparedness industrial base; (3) the information and communications technology (ICT) industrial base; (4) the energy sector industrial base; (5) the transportation industrial base; and (6) supply chains for agricultural commodities and food production. Under this more in-depth review, federal departments and agencies are instructed to review a variety of risks to supply chains and industrial bases, including identifying critical goods and materials within supply chains, the manufacturing or other capabilities needed to produce those materials, and any vulnerabilities created by failure to develop domestic capabilities. This assessment will also include identifying locations of key manufacturing and production assets, the availability of substitutes or alternative sources for critical goods, the state of workforce skills and gaps for all sectors, and the role of transportation systems in supporting supply chains and industrial bases. At the conclusion of the review, each department and agency must make specific policy recommendations to address risks.
The Assistant to the President for National Security Affairs (APNSA) and the Assistant to the President for Economic Policy (APEP) have been tasked with coordinating these reviews and any actions necessary to implement this executive order. At the conclusion of the one-year review, the APNSA and the APEP must provide President Biden reports reviewing the actions and making recommendations. They will also establish and oversee a quadrennial supply chain review, including processes and timelines regarding ongoing data gathering and supply chain monitoring.