Mike Peterson
Following nearly six months of profound availability constraints, the US government is about to assess semiconductor, battery, and rare earth metal supply chains for inefficiencies and national security concerns.
The assessment will analyze the "resiliency and capacity of the American manufacturing supply chains and defense industrial base" to support areas like national security and emergency preparedness, according to a draft executive order seen by CNBC. The review will be carried out by Biden's economic and national security teams.
According to the draft order, the Biden Administration plans to review gaps in domestic manufacturing and supply chains that are currently dominated or rely on "nations that are or are likely to become unfriendly or unstable."
The executive order is being finalized, and the White House could change the actual text of it by the time it's implemented.
The review will take place in two parts. The first phase will comprise a 100-day review of supply chains for high-priority items like semiconductors, batteries, and medical supplies. The second phase will broaden the review to sectors, including public health, energy, and transportation.
A year after the order is issued, the team will submit an analysis and recommendations on potential actions to take. Those could include trade route edits or diplomatic agreements.
Analysts expect relations with China to normalize under President Biden. That's after a four-year trade war between China and the U.S. that was marked by tariffs and export bans.
Although the executive order doesn't specifically mention China, President Biden said that his administration was readying itself for "extreme competition" with the country. The order would be one of Biden's first tangible efforts to shore up both American economic and defense interests.
Meanwhile, Apple is reportedly in the midst of diversifying its supply chain and moving some of its manufacturing outside of China. The Cupertino tech giant's supply chain and production processes are highly dependent on China, an issue underscored by the pandemic.
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15 Comments
hope they look at medical supplies also
The reason this is happen is due to the fact many companies had cut back production due to the fact our governments were spreading doom and gloom to the point companies had not idea what to expect other than to think demand was going to drop off. These companies cut supplier quickly since they did not want to get caught with over supplier and inventory because this is the quickest way of going out of business. Then add in all the rules and travel restrictions which does not allow companies to run at full operational capacity because people can not work close to one another. At this point all the supplier are behind the demand curve and will not catch up until the end of year assuming the useful idiots in our government do not put in more road blocks in the way.
The problem now is the fact the government is just walking up and realizing their supplier can not get chips to make military equipment. Even if the chips are made in the US much of the raw materials to make chips come out of China. Then add in the fact many of the shipping companies took container ship off line to maintenance and repair during what they though was going to be decrease demand time.
Let just hope the government does not create more problem so the problem gets worse.
Only government can take 100 days to find the answer to a question that the average person can find in 5 minutes. Check please.
And Australia ships it all to China for refining. None of that icky work stuff thank you very much. Too much green and red tape.
Now that the parents have returned, we can get on with the here and now.
The creepy uncle that didn't understand anything that wasn't trying to shove cash in his pocket, has left the building...