On February 24, 2021, President Biden issued an executive order (EO) to secure America’s supply chains.
Again, on February 25, 2021, trade and supply chain topics were front and center at the Senate Finance Committee’s confirmation hearing for the United States Trade Representative, Katherine Tai. At the Hearing, Ms. Tai said, “We cannot compete by doing what China does.” She also stated, “The supply chain is the most important question across the board.” It’s clear, the Biden administration is prioritizing trade early in his first year.
While the EO was expected, it comes at a time when the U.S. supply chain constraints have been worsening by the day due to the COVID-19 pandemic. These constraints have an adverse impact on all sectors of our economy, including everything from health care to transportation. For example, critical medical goods and components from China are not
able to be shipped because of the lack of available ocean-going containers, and then, if the containers do reach the U.S., there are bottlenecks at our ports to unload the shipping containers, also due to the pandemic. This is just one example, but it equates to major manufacturing disruptions to the U.S. supply chain and puts people in possible life-threatening situations.
The EO intends to accomplish the following:
- Establish a broad, coordinated, government-wide strategy to develop stronger supply chains across the U.S.
- Call for a review of R&D capabilities, domestic production, and creation of strategies to strengthen critical sectors
- Outline a 100-day supply chain review for four key sectors, including pharmaceutical ingredients, critical minerals and rare earth elements, semiconductors, and large-capacity batteries used in electric vehicles
- Create a one year, in-depth review of a wider set of supply chains to include: 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
- Request the government to consult with outside stakeholders in “industry, academia, non-governmental organizations, communities, labor unions, and state, local and tribal governments.”
What are the next steps for companies and organizations directly impacted by the supply chain disruptions?
The February 24 EO presents an opportunity for engagement. If your business has experienced supply chain issues impacting your operations, the mandate is clear: The Biden administration would like to hear from you. The findings of the EO will allow Congress and the administration to develop legislation and write amendments to legislation that get the desired results of improving and securing our supply chain.
The Congressional jurisdiction on these matters is far and wide. Already this year several Senate and House Committees (Senate Finance, House Transportation & Infrastructure, House Energy & Commerce) have held hearings on a wide variety of supply
chain and COVID-19 related issues and possible workforce reforms needed to strengthen the U.S. supply chains. The EO invites industry to advocate to the U.S. government about your specific supply chain needs and the issues that you think should be considered as the government debates various policy issues in the 117th Congress.
In the end, trade enforcement is vital to ensure a level playing field for American companies and workers. Calfee will continue to assist our clients in understanding the EO and the process it establishes and help guide them to engage productively with the government for desired outcomes. If you would like to discuss our work and, specifically, our government relations activities related to supply chain challenges and the February 24 EO, please contact us.