Biden, Harris meet bipartisan group of lawmakers on supply chain issues, sign executive order
Senior administration officials say executive order does not mention China, or single out China
President Biden and Vice President Kamala Harris met with a bipartisan group of House and Senate lawmakers at the White House Wednesday afternoon to discuss supply chain issues, including a shortage in semiconductor chips.
The meeting came as the president is set to sign an executive order to direct a 100-day review of supply chains in four areas — computer chips, large capacity batteries, pharmaceuticals and critical minerals and rare earth materials.
The order will also direct six sector reviews to be completed in one year focused on defense, public health and biological preparedness, information and communications technology, transportation, energy, and food production.
Intelligence and national security officials, as well as lawmakers on both sides of the aisle, have warned that China poses a threat to the U.S. supply chain, but senior administration officials said that the executive order does not mention China, or single out China, but instead focuses on other vulnerabilities.
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“We are not singling out any country by name in the executive order,” one official said. “We see an effort to build strong and resilient supply chains across a range of critical products and sectors, and those vulnerabilities are capacity, single point of failure, potential for environmental disaster.”
The official added that they are “intending to look with this review and address a range of different vulnerabilities,” specifically at where the U.S. is “excessively dependent on competitor nations” including China.
“We’re looking at risks on dependence, but that is one of the range of risks we’re looking at,” the official said.
Another official noted that it is “not our intention” to move all supply chains to America, but instead the “over-concentration and over-reliance on specific countries and specific goods that are critical and essential are a risk to the global economy as a whole.”
“We are looking at this in a holistic way and a way that’s committed to working with allies and partners moving forward, and using America’s multi-lateral tradition to look at it in a global way,” the official said.
Senior Director for International Economics and Competitiveness Peter Harrell said Wednesday that America “should never face shortages of critical products in times of crisis,” pointing to personal protective equipment during the early stages of the coronavirus pandemic, and computer chips to maintain full production of automobiles in the U.S.
“Our supply chain should not be vulnerable to manipulation by competitor nations,” Harrell said, adding that this is the “first whole of government approach to promoting the resilience of American supply chain—from pharmaceuticals to foods.”
“We are going to get out of the business of reacting to supply chain crises as they arise, and get into the business of preventing future supply chain problems,” Harrell added.
Deputy Director of the National Economic Council Sameera Fazili said that the administration will be asking agencies to review risks in supply chains, pointing to the industrial base, climate risk, and geopolitical risks.
“But there is also a risk in not having enough workers, factories or equipment to shift to a new spike in demand for an essential good,” she said, adding that the administration will be committed to new “public-private partnerships” that “build on our nation’s strengths.”
The White House says Biden’s order will “build on bipartisan Congressional action and leadership on this issue, and the Administration will remain in close touch with Congress to solicit recommendations during the review.”
Meanwhile, the global semiconductor shortage roiling automakers, including General Motors and other industries, is now a priority for the White House which is investigating “choke points in the supply chain” which are hurting American workers.
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The U.S. has slipped in manufacturing against rivals with its share of worldwide manufacturing capacity now at just 12% compared to 37% in 1990, according to the Semiconductor Industry Association, whose company members include AMD, Nvidia, Micron and others.
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Ford and others have warned of production shutdowns due to the shortage which is being caused, in part, due to heavy demand for electronics and other products coveted during the pandemic and the working from home mandate from many industries.
"Make no mistake, we are not simply ordering reports," Harrell said of the executive order Wednesday. "We are going to be taking actions to close gaps as we identify them — just as we’ve been working with industry in recent weeks — to ensure U.S. auto manufacturers have the parts they need to keep making cars here in America."
After the meeting, Rep. Mike McCaul, R-Texas, and Sen. John Cornyn, R-Texas, said the U.S. needs to compete with China on things like semi-conductors and 5G, while calling China a national security threat to the United States.
McCaul also said he was pleased that supply chain issues are a priority for the Biden administration.
"I want to thank President Biden for a robust discussion on the importance of securing our vital semiconductor supply," McCaul said in a statement after the meeting. "We need to do all we can to develop and produce more of these tiny chips here in America that are the brains behind the innovations of tomorrow such as 5G, quantum computing, and artificial intelligence (AI)."
McCaul added that the Chinese Communist Party "is spending billions of dollars to become the leader in the production of semiconductors" and said the U.S. "cannot fall behind and endanger our economic and national security."
"I am encouraged President Biden is prioritizing the protection of critical technologies and look forward to working with his administration to get the CHIPS Act funded as soon as possible," McCaul said.
The CHIPS Act would restore semiconductor manufacturing back to American soil by increasing federal incentives to stimulate advanced chip manufacturing, enable cutting-edge research and development, secure the supply chain and bring greater transparency to the microelectronics ecosystem, create American jobs, and ensure long-term national security.
The legislation is bicameral and has bipartisan support.
FOX Business' Suzanne O'Halloran contributed to this report.