In its new “Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-Based Growth” report, the Biden Administration has pledged to help “unkink” the supply chain bottlenecks that started in 2020 and then gained significant momentum in 2021. As part of the president’s 100-day administration review, the report discussed how the COVID-19 pandemic and resulting economic dislocation revealed long-standing vulnerabilities in the nation’s supply chains.
The pandemic’s drastic impacts on demand patterns for a range of medical products including essential medicines wreaked havoc on the U.S. healthcare system, the report states. “As the world shifted to work and learn from home,” it continues, “it created a global semiconductor chip shortage impacting automotive, industrial, and communications products, among others.”
In February, extreme weather events—exacerbated by climate change—contributed to the shortages. “In recent months the strong U.S. economic rebound and shifting demand patterns have strained supply chains in other key products, such as lumber,” the report states, “and increased strain on U.S. transportation and shipping networks.”
Also in February, President Biden signed the “America’s Supply Chains” executive order, effectively directing the U.S. government to undertake a comprehensive review of critical, national supply chains to identify risks, address vulnerabilities and develop a strategy to promote resilience.
What’s Causing the Supply Chain Disruption?
In the report, the Biden Administration breaks its priorities down into four segments: semiconductor manufacturing and advanced packaging; large-capacity batteries; critical minerals and materials; and pharmaceuticals. It says the key drivers of supply chain vulnerability within these segments include:
A Concentrated Effort
Admitting that the currently level of supply chain disruption can’t be fixed overnight, the Biden Administration says it will take a concerted effort over the short-, medium- and long-term to adequately address these issues and put U.S. supply chains on stronger footing. Among its key recommendations for fixing the problem include rebuilding U.S. production and innovation capabilities; enacting new federal legislation that will strengthen critical supply chains and rebuild the nation’s industrial base; and establishing a new Supply Chain Resilience Program.
“We recommend that Congress enact the proposed Supply Chain Resilience Program at the Department of Commerce, to monitor, analyze, and forecast supply chain vulnerabilities and partner with industry, labor, and other stakeholders to strengthen resilience,” the report’s authors write, “[and that it] back this program with $50 billion in funding [to] give the federal government the tools necessary to make transformative investments in strengthening U.S. supply chains across a range of critical products.”