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U.S. Supply Chain Resilience: 30 new actions to strengthen supply chains critical to America’s economic and national security

30 new actions to strengthen supply chains critical to America’s economic and national security

At the inaugural Cabinet-level Council on Supply Chain Resilience (the “Council”) meeting on November 27, President Biden announced almost “30 new actions to strengthen supply chains critical to America’s economic and national security.”

The Supply Chain Resilience Centre was one of 30 measures. The Centre, formed by DHS, ensures supply chain resilience for key infrastructure required to offer important services to the American people.Near-term Centre aims include reducing supply chain risks from US port threats and vulnerabilities.” In summer 2022, “more than 150 ships were stuck in queues to enter US ports,” delaying arrivals for weeks. “DHS will conduct at least two tabletop exercises in 2024 with other federal agencies and foreign countries to evaluate essential cross-border supply chain resilience. Together, DHS and Commerce will strengthen the US semiconductor supply chain “and further implementation of the CHIPS and Science Act,” passed last year.

The White House said it will utilise the Defence Production Act “to make more essential medicines in America and mitigate drug shortages.” The President proposes a Presidential Determination to increase HHS duties and promote home production of essential drugs, medical countermeasures, and inputs.

Multiple government agencies will increase supply chain data interchange. Commerce's Supply Chain Centre will create “innovative supply chain risk assessment tools” using “industry expertise and data analytics Supply Chain Centre will work with DOE “to conduct deep-dive analyses on clean energy supply,” and Commerce will work with HHS “to assess industry and import data that can help address foreign dependency vulnerabilities and points of failure for critical drugs.”

The White House announced a quadrennial supply chain evaluation, the first of which would be completed by December 31, 2024. The Council “will update criteria on industries, sectors, and products defined as critical to national and economic security.” The Council will update the essential sectors list yearly as appropriate.

New critical supply chain investments were in the White House Fact Sheet:

DOE Advanced Energy Manufacturing and Recycling Grants totaled $275 million. The Programme invests in “grid-scale batteries and electric vehicles” and onshore wind turbines to “revitalize communities affected by coal mine or coal power plant closures through clean energy supply chains.”

The USDA is investing $196 million to modernise food supply chains and provide “more opportunities for farmers and entrepreneurs” countrywide. The White House expects this spending to “expand farmer income opportunities, create economic opportunities for people and businesses in rural areas, and lower food costs.”

Department of military “will publish the first ever National Defence Industrial Strategy,” which will “guide engagement, policy development, and investment in the defence industrial base over the next three to five years.” The White House believes this strategy would “ensure a coordinated, whole-of-government approach to and focus on the multiple layers of suppliers and sub-suppliers that make up these critical supply chains.”

Different actions:

Smart manufacturing research, a new Office of Multimodal Freight Infrastructure and Policy, climate monitoring, an energy and vital mineral supply chain preparedness tool, and a Supply Chain Mapping Tool to evaluate supplier data for 110 weapons systems are among these projects.

Fact Sheets from the White House explain these actions. The White House Fact Sheet did not name China, but the planned efforts seem to be consistent with the Biden Administration's language about “de-risking” and “diversifying,” including the US supply chain. These changes may threaten Chinese commodities' long-term presence in the US supply chain, especially in sensitive sectors, thus interested parties should be alert.

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