White House unveils supply chain review findings, launches task force to tackle challenges

The White House on Tuesday released the findings of a 100-day review of critical supply chains ordered by President Joe Biden and announced a series of actions to address the supply-chain vulnerabilities it found.

That includes establishing a "Supply Chain Disruptions Task Force" that will be tasked with devising a response to near-term supply-chain challenges across the whole government. The task force will be led by the secretaries of commerce, transportation and agriculture, and will focus on homebuilding and construction, semiconductors, transportation, and agriculture and food.

The administration said it also will "immediately" take steps aimed at securing a domestic supply chain for advanced batteries, invest in the production and processing of critical minerals, and team up with industry stakeholders and allies to address semiconductor shortages, among other moves.

The goal, administration officials said, is to rebuild domestic manufacturing capability for certain products, diversify supply sources for others, and ensure that future shocks to the system don't result in the types of shortages the U.S. has experienced during the pandemic.

The administration was slated to release 250 pages detailing its findings Tuesday. Additional supply-chain-related announcements are expected in the coming weeks and months.

The review found, among other things, that even if the U.S. were to diversify its sources of critical minerals or increase domestic extraction, it would still be reliant on China to process the minerals; that the U.S. potentially is exposed to "supply chain vulnerabilities" due to its heavy reliance on importing the parts needed for large capacity batteries; and that the country relies far too heavily on semiconductor chips imported from Asia, according to a fact sheet from the White House.

U.S. Rep. Debbie Dingell, D-Dearborn, applauded the administration's plan, saying in a statement Tuesday: "Today’s strategy to strengthen our supply chains, while also supporting working families, is critical to rebuilding our economy and protecting national security so that the United States can stay out in front of the competition.

“By supporting the domestic production of critical medicines and personal protective equipment, working to improve our supply chain management practices to strengthen the semiconductor and advanced batteries supply chains, investing in the sustainable production of raw materials, and ensuring our nation’s cyber security, we can take immediate action to support workers and boost American innovation."

Biden on Feb. 24 issued an executive order directing a review of U.S. supply chains, with a focus on key sectors affecting the automotive industry. Those include semiconductor manufacturing, high-capacity batteries used in electric vehicles, and rare earth minerals. 

The order also directed agencies to complete sector-specific reviews in defense, public health, communication technology, transportation, energy and food production within one year.

The release of the findings comes as the auto industry, as well as other sectors, continue to grapple with a months-long shortage of semiconductor chips, parts that are essential to power a number of automated and electronic features in vehicles. The shortage has hit the Detroit automakers particularly hard.

Automakers and industry analysts have said they expect the worst of the shortage to hit this quarter, then ease through the second half of the year. But a more permanent solution will require bringing additional capacity online as the growth in more technologically advanced vehicles fuels greater demand for the parts.

The release also comes as U.S. automakers and their foreign competitors invest heavily in electrification and autonomous driving technologies. 

The administration on Tuesday announced several actions, led by the Department of Energy, aimed at bolstering domestic research, manufacturing and processing of advanced batteries, demand for which will grow as automakers electrify their vehicle lineups.

The strategy will have requirements that companies that develop new products with federal support manufacture those products in the U.S., according to an administration official.

DOE will release a "National Blueprint for Lithium Batteries" that "will codify the findings of the battery supply chain review in a 10-year, whole-of-government plan to urgently develop a domestic lithium battery supply chain," according to the fact sheet. DOE later this month will host a roundtable with representatives from the battery supply chain to discuss the blueprint.

DOE also will leverage some $17 billion from the Advanced Technology Vehicles Manufacturing Loan Program to support the domestic battery supply chain. The department's Loan Programs Office will, for example, make loans to manufacturers of advanced battery cells and packs to re-outfit, expand or establish manufacturing sites in the U.S.

And DOE's Federal Energy Management Program will launch an energy storage review across the federal government to evaluate "the current opportunity for deploying battery storage at federal sites."

Meanwhile, in a move aimed at shoring up the supply chain for critical minerals, the Department of the Interior will be tasked with setting up a multi-agency working group to identify sites where such minerals could be made and processed in the U.S.

The Department of Defense will offer incentives to support production of "strategic and critical materials," and the U.S. Development Finance Corporation will expand international investments in projects that will increase production capacity for products including critical minerals.

To help address semiconductor shortages, the administration said the Department of Commerce will "bolster its partnership" with industry stakeholders to facilitate communication and data-sharing between semiconductor users and their supply base.

The administration also shared some longer-term actions. The Department of Labor later this month, for example, will announce $100 million in grants to support apprenticeship expansion efforts at the state level, as well as the establishment of national apprenticeship centers. And the administration plans to establish a trade strike force, led by the U.S. trade representative, to propose enforcement actions for unfair foreign trade practices.

The administration also is calling on Congress to take action on shoring up supply chains. Among other moves, it is asking Congress to support at least $50 billion in investments for domestic manufacturing and research and development of semiconductors, incentives to spur consumer adoption of electric vehicles, the establishment of a new supply chain resilience program, financing to support advanced battery production, and expanded use of the Defense Production Act to increase production capacity in certain "critical" industries.

jgrzelewski@detroitnews.com

Twitter: @JGrzelewski

Washington Correspondent Riley Beggin contributed.