Biden signs order aimed at improving semiconductor, EV battery supply chains

US President Joe Biden signed an executive order Feb. 24 aimed at addressing vulnerabilities in the US supply chain for essential goods, including semiconductors and large capacity batteries for electric vehicles.

The order directs an immediate 100-day review across federal agencies to address vulnerabilities in the supply chains of four key products: critical minerals, semiconductors, large capacity batteries – such as those used in electric vehicles – and APIs (the parts of pharmaceutical products that contain the active drug).

The 100-day review will identify near-term steps the administration can take, including with Congress, to address vulnerabilities in the supply chains for these critical goods, Biden said in broadcast remarks ahead of signing the order.

Struggles to source personal protective equipment at the onset of the pandemic, in addition to recent shortages of automotive semiconductor chips, highlight how shortages can hurt US workers, he said.

Semiconductors have become an increasingly critical component for automotive manufacturers as they add more electronic features to vehicles.

The semiconductor shortage has impacted vehicle production in early 2021, including among North America's Big Three automakers.

Large capacity batteries also were included as part of this review as climate initiatives are expected to increase demand for electric vehicles. While the US is a net exporter of electric vehicles, it is not a leader in the supply chain associated with electric battery production, the White House said in a fact sheet.

"The US could better leverage our sizable lithium reserves and manufacturing know-how to expand domestic battery production," the White House said.

The Biden administration will be looking at a range of different tools tailored for each good, Peter Harrell, senior director for international economics and competitiveness, said in a press briefing Feb. 24.

Biden and Vice President Kamala Harris met with a bipartisan group of lawmakers the afternoon of Feb. 24 to discuss the order, which Biden said went well as both democrats and republicans are supportive of improving and securing the US supply chain.

The administration also will work with business impacted by the semiconductor shortage to find solutions, Biden said.

Additionally, the order calls for a more in-depth one-year review of a broader set of US supply chains, including: 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.

Biden's executive order is encouraging, but policies supporting US manufacturing must follow this review, said Scott Paul, president of the Alliance for American Manufacturing. "The most important aspect of the executive order is the policy that will ultimately flow from it," Paul said. "Bold and dramatic shift in priorities – from tax and trade policy to innovation and checks on financialization – are necessary to secure a strong future for American workers, our manufacturing base, and our nation."