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Biden-ordered review of supply chain to include electric car batteries, medical supplies and rare earth metals
WASHINGTON — President Biden will sign an executive order that will require the government to produce unclassified assessments of key industries and their supply chains, including semiconductor manufacturing, electric car batteries, medical supplies, and rare earth elements such as the ones used in iPhones and military systems.
The executive order, first reported on by Reuters and mentioned by White House press secretary Jen Psaki last week, details specific types of technology important to the U.S. supply chain, individual sectors to focus on and a range of threats that could affect access to vital materials, according to a draft copy of the order seen by Yahoo News and confirmed by a second source who was familiar with its contents.
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Psaki said the order would be released in the coming weeks. The White House did not immediately respond to a request for comment.
The U.S. government is under increasing pressure to understand the sprawling network of companies, both domestic and foreign, that produce and obtain critical products and goods. Recent events, such as the COVID-19 pandemic and the SolarWinds breach that affected government and private networks, have only highlighted the issue further.
According to the draft executive order, the Biden administration will order a 100-day review of the supply chain in light of threats — such as pandemics, cyberattacks and extreme weather events — that could pose a risk to accessing essential goods. The draft also identifies specific sectors the White House hopes to review, ranging from the defense industrial base to the energy and transportation industries.
Specifically, Biden is directing the executive branch to take a closer look at the semiconductor manufacturing industry; high-capacity batteries, including those used for electric cars; rare earth materials; and medical supplies. China is a strong competitor in these sectors. For example, in the past decade, China accounted for more than 90 percent of production and supply of rare earth elements used in products ranging from iPhones to lasers, according to a 2017 U.S. Geological Survey.
The White House will request, within a year, a written assessment of critical goods, which should include a review of the necessary capabilities to produce them, a review of the various factors that could affect production, and the resiliency of American industrial sectors, among other areas.
Securing the supply chain is one of many major foreign policy challenges the Biden White House is taking on early in the administration. The decision to order an expansive review tracks with the White House’s demonstrated preference to move slowly and deliberately on complex foreign policy matters, in consultation with allies and experts.
The Biden administration is not the first to express concerns about these issues. The Trump administration released an executive order in October with the aim of reviewing rare earth mineral mining and suggesting ways to boost domestic production and reduce reliance on China.
A source familiar with the issue, Mark Esper, who served as secretary of defense under Trump, named the production of rare earth elements the No. 1 priority of the industrial base prior to the pandemic, and it appears the Biden administration is continuing those efforts. The Pentagon earlier this month announced a contract with Australian company Lynas Rare Earth “to establish domestic processing capabilities” in the U.S. “for light rare earth elements,” an effort begun under the prior administration.
According to another industry source, government investigators reviewing transactions with foreign ties in the final days of the Trump administration ramped up their focus on semiconductors and the energy sector, seeking additional information on any foreign company or entity that might have access to the electric grid. The question is, the source said, whether the Biden administration will offer any further specific instructions for the industry on compliance with rules about foreign investment and other requirements, such as on cybersecurity standards, something the Trump administration largely failed to do.
“The national security priorities, I don’t think, have changed,” the source noted. “It’s kind of a reckoning.”
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