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On February 24, 2021, President Biden signed an Executive Order (EO) that directs his administration to undertake a 100-day review of the supply chains of four key products: active pharmaceutical ingredients (APIs), critical minerals,1 semiconductors and advanced packaging, and large capacity batteries. The primary goal of this 100-day review is to identify actions that can be taken immediately to fix vulnerabilities in supply chains for these goods. Additionally, the EO calls for a more in-depth, one-year review of the supply chains of six key sectors: the defense industrial base, the public health and biological preparedness industrial base, the information and communications technology (ICT) industrial base, the energy sector industrial base, the transportation industrial base, and supply chains for agricultural commodities and food production. Both reviews will examine critical goods and materials2 and other essential goods and materials3 in these supply chains. The end product will be reports with recommendations on actions that should be taken to protect and bolster these supply chains. In preparation for any potential changes the government may implement in response to these reports, companies should begin to evaluate their supply chains to determine whether they do business or utilize goods within the key sectors identified above.

Authors: Michael J. Lowell Manasi Venkatesh Liza V. Craig Lizbeth Rodriguez-Johnson Sarah S. Wronsky Paula A. Salamoun Julianne K. Nowicki Robert J. Tritschler

Background

President Biden has declared that the United States needs resilient, diverse, and secure supply chains to ensure our economic prosperity and national security, and he has made the security of these supply chains a priority. In the wake of the COVID-19 pandemic and other biological threats, cyber-attacks, extreme weather events, terrorist attacks, geopolitical and economic competition, and other conditions, the viability of the critical manufacturing capacity of the United States and the availability and integrity of critical goods, products, and services has been put at risk. Citing the pressure of these events, President Biden signed a comprehensive EO that directs the heads of federal departments and agencies to identify ways to secure and protect U.S. supply chains from various risks and maintain the nation’s competitive edge in the global economy while improving its national security posture. The ultimate objective of the reviews ordered by the EO is to generate well-informed recommendations that will create more resilient supply chains that are secure, utilize domestic production as much as possible, enable adequate stockpiles, and maintain close cooperation on strong supply chains with allies.

100-day review details

The 100-day review will focus on the following supply chains: API supply chains, as the administration cites, in recent decades more than 70 percent of API production has moved offshore; critical minerals supply chains,4 such as rare earths for electric motors, carbon fiber for manufacturing, and other commodities that are vital for the defense, technology, and manufacturing sectors; semiconductors and advanced packaging supply chains; and large capacity batteries supply chains, such as those used in electric vehicles.

The target of the 100-day review is to identify the steps that the administration can quickly take, including in conjunction with Congress, to protect U.S. supply chains. This review will be coordinated by the assistant to the president for national security affairs (APNSA) and the assistant to the president for economic policy (APEP), who will coordinate with the following specified heads of departments, who will work in consultation with the heads of appropriate agencies,5 to create recommendations to fulfill the goal of the EO: the secretary of commerce (Commerce); the secretary of energy (Energy); the secretary of defense, as the national defense stockpile manager (Defense); and the secretary of health and human services (HHS).