President Biden Convenes First Meeting of the Council on Supply Chain Resilience, Announces Actions to Further Strengthen Critical Supply Chains
On November 27, at the inaugural meeting of the Cabinet-level Council on Supply Chain Resilience (the “Council”), President Biden unveiled almost “30 new actions to strengthen supply chains critical to America’s economic and national security.”
The nearly 30 actions included the launch of a Supply Chain Resilience Center (the “Center”). The Center was formed by the US Department of Homeland Security (DHS), and it is “dedicated to ensuring the resilience of supply chains for critical infrastructure needed to deliver essential services to the American people.” The Center’s more immediate priorities “will include addressing supply chain risks resulting from threats and vulnerabilities inside US ports.” In the summer of 2022, “more than 150 ships were stuck in queues to enter US ports,” which caused weeks-long delays. In 2024, “in collaboration with other federal agencies and foreign governments, DHS will facilitate at least two tabletop exercises designed to test the resilience of critical cross-border supply chains.” DHS and the US Department of Commerce (Commerce) will also continue to work together to strengthen the United States’ semiconductor supply chain “and further implementation of the CHIPS and Science Act,” which was passed last year.
The White House also said it would be using the Defense Production Act “to make more essential medicines in America and mitigate drug shortages.” To that end, the President plans to issue “a Presidential Determination to broaden the Department of Health and Human Services’ (HHS) authorities . . . to enable investment in domestic manufacturing of essential medicines, medical countermeasures, and critical inputs{.}”
Multiple government agencies will also collaborate to enhance their supply chain data-sharing capabilities. Commerce will integrate into its Supply Chain Center “industry expertise and data analytics to develop innovative supply chain risk assessment tools.” The Supply Chain Center will collaborate with the Department of Energy “to conduct deep-dive analyses on clean energy supply,” and Commerce will also work with HHS “to assess industry and import data that can help address foreign dependency vulnerabilities and points of failure for critical drugs.”
In addition, the White House announced the launch of a quadrennial supply chain review, the first of which will be completed by December 31, 2024. The review will be conducted by the Council, and as part of the review the Council “will update criteria on industries, sectors, and products defined as critical to national and economic security.” The Council plans to update the list of critical sectors on an annual basis, as appropriate.
The White House Fact Sheet also revealed new investments in critical supply chains, including the following:
- The Department of Energy announced $275 million in grant selections for its Advanced Energy Manufacturing and Recycling Grant Program. The Program’s goal is to “revitalize communities affected by coal mine or coal power plant closures through investment in clean energy supply chains,” such as inputs for “grid-scale batteries and electric vehicles,” and production of other renewable energy sources like onshore wind turbines.
- The US Department of Agriculture is investing $196 million to strengthen the country’s domestic food supply chains, and to provide “more opportunities for farmers and entrepreneurs” throughout the country. The White House expects that these investments will “expand farmer income opportunities, create economic opportunities for people and businesses in rural areas, and lower food costs.”
- The Department of Defense “will publish the first ever National Defense Industrial Strategy,” which will “guide engagement, policy development, and investment in the defense industrial base over the next three to five years.” The White House believes this strategy will “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.”
Other actions include:
- sponsoring a study “to develop a nationwide plan for smart manufacturing”;
- launching a new Office of Multimodal Freight Infrastructure and Policy to maintain and improve “the condition and performance of the nation’s multimodal freight network”;
- monitoring climate impacts;
- developing a tool to assess the country’s energy and critical mineral supply chain readiness;
- creating a Supply Chain Mapping Tool to analyze supplier data for 110 weapons systems, further “[e]ngaging public and private stakeholders to expand supply chain risk modeling”; and
- furthering the country’s “engagement with allies and partners to strengthen global supply chains.”
Additional information about these actions can be found in the White House Fact Sheet. Even though China was not mentioned in the White House Fact Sheet, the announced actions appear to be consistent with the Biden Administration’s rhetoric that it does not seek “decoupling” with the Chinese economy, while “de-risking” and “diversifying,” including with respect to the US supply chain, are necessary and appropriate. Such actions may affect the role that Chinese products may play in the US supply chain in the long term, especially with respect to critical and/or sensitive sectors, and thus interested parties should take note of this development.
1 White House, Fact Sheet: President Biden Announces New Actions to Strengthen America’s Supply Chains, Lower Costs for Families, and Secure Key Sectors (Nov. 27, 2023), [hereinafter Fact Sheet].
5 https://insidetrade.com/sites/insidetrade.com/files/documents/2023/nov/wto2023_1034a.pdf
6 See https://www.mayerbrown.com/en/perspectives-events/publications/2022/08/president-biden-signs-chips-act-into-law for background on the Act.
