Tag Archives: critical supply chains

Biden supply chain ‘strike force’ to target China on trade

“We’re trying to understand all of the logistics behind the supply chain” to loosen bottlenecks, Jared Bernstein, an economic adviser to Biden, told Reuters. “One of the best ways to do that is to talk to people in the industry and we’re doing a lot of that.”

The United States faced serious challenges in obtaining medical equipment during the COVID-19 epidemic and now faces severe bottlenecks in a number of areas, including computer chips, stalling production of goods, such as cars.

While the White House said it is working closely with private industry to find solutions for the shortages, officials also said companies were part of the problem.

“Decades of focusing on labor as a cost to be managed and not an asset to be invested in have weakened our domestic supply chains, undermining wages and union density for our workers,” and made it harder for companies to find skilled talent, Sameera Fazili, deputy director of the National Economic Council, told reporters.

U.S. agencies are required to issue more complete reports a year after Biden’s order, identifying gaps in domestic manufacturing capabilities and policies to address them.

TRADE WARS WITH ALLIES NOT WANTED

But the White House offered little in the way of new measures to immediately ease chip supply shortages, noting in a fact sheet that the Commerce Department would work to “facilitate information flow” between chip makers and end users and increase transparency, a step Reuters previously reported.

In medicine, the administration will use the Defense Production Act to accelerate efforts to manufacture 50 to 100 critical drugs domestically rather than relying on imports.

And to address supply bottlenecks from lumber to steel that have raised fears of inflation, the administration is starting a task force focused on homebuilding and construction, semiconductors, transportation, as well as agriculture and food.

“We fully expect these bottlenecks to be temporary in nature and to resolve themselves over the next few weeks,” said Fazili.

Semiconductors are a central focus in sprawling legislation currently before Congress, which would pump billions of dollars into creating domestic production capacity for the chips used in everything from consumer electronics to military equipment.

Biden has said China will not surpass the United States as a global leader on his watch, and confronting Beijing is one of the few bipartisan issues in an otherwise deeply divided Congress.

But some lawmakers have expressed concerns that a package of China-related bills includes huge taxpayer-funded outlays for companies without safeguards to prevent them from sending related production or research to China.

The White House said a measure of success of the supply chain effort would be more diverse suppliers for crucial products from like-minded allies and partners, and fewer from geopolitical competitors.

“We know that as we strengthen cooperation with our allies and partners, we also have to push back against unfair trade practices by competitor nations that have hollowed out the U.S. industrial base and undermine our supply chain security,” said Harrell.

(Reporting by Michael Martina, Trevor Hunnicutt and Heather Timmons in Washington; Editing by Mary Milliken, Nick Zieminski and Matthew Lewis)

Many key China issues still ‘under review’ at Biden’s first 100 days

By Michael Martina and Matt Spetalnick

WASHINGTON (Reuters) – As U.S. President Joe Biden’s first 100 days come to a close this week, a number of key policy positions and contentious issues remain “under review,” to use the White House’s terminology.

They stretch from deep-seated economic issues a generation in the making to controversial policies introduced by Republican President Donald Trump’s government, which preceded the Democratic Biden administration.

Many relate to China, the United States’ strategic competitor, a rivalry that Biden has starkly defined, most recently in a speech to Congress on Wednesday, as a struggle between democracy and autocracy for control of the global economy in the 21st century.

The Biden administration has begun to flesh out an overarching strategy to compete with China that relies on renewing relations with partners like India and allies like Japan and South Korea, and heavy domestic investment.

But critics say slow reviews of specific policies could cost U.S. companies and the economy.

After Biden’s speech, Republican Senator Mitt Romney told reporters, “I don’t believe we yet have as a nation a comprehensive strategy to deal with a China intent on dominating the world, eventually.”

“We don’t have the luxury of time to sit around and marvel at the problem,” said one Republican aide in the House of Representatives, speaking on condition of anonymity. “We need action and specific policies in place.”

The White House did not respond to a request for comment on the Republican criticism of their policy reviews. Democrats argue privately, however, that the administration is still racing to get crucial jobs filled.

Biden has yet to name an ambassador to China and many other countries, or to fill a key post at the Commerce Department’s Bureau of Industry and Security, which oversees exports of critical U.S. technology to China.

Administration officials have said they will look to add “new targeted restrictions” on some sensitive technology exports to China in cooperation with allies, but have not offered further details.

TARIFFS ON CHINESE GOODS

The Biden administration has said it will conduct a thorough review of U.S. tariffs imposed by the Trump administration on nearly $400 billion worth of Chinese goods, but it has not given a deadline.

U.S. Trade Representative Katherine Tai said in a recent interview that the United States was not ready to lift the duties, in part because of the leverage it gives American negotiators.

The tariffs cost U.S manufacturers $80 billion, the Tax Foundation think tank reported last September. China has fallen short of pledges to buy U.S. goods made in a January 2020 trade deal.

SUPPLY CHAIN REVIEW

Biden launched a 100-day review of risks to critical supply chains in February, citing the United States’ need for secure, diverse, dependable goods in sectors such as pharmaceuticals, semiconductors, electric vehicle batteries, and rare earth minerals.

The Defense, Commerce, Energy, Agriculture, Transportation, Homeland Security, and Health and Human Services departments are expected to submit reports addressing supply chain resiliency due one year after the February order.

INVESTMENT BAN

The Biden administration also has not addressed how it will use a tough sanctioning tool introduced by Trump that would prohibit U.S. investments in Chinese companies that the previous administration said were owned or controlled by the Chinese military.

NORTH KOREA

The Biden administration has signaled for weeks it is finalizing a broad review of North Korea (Successive U.S. administrations have sought to persuade the Stalinist country to part with its nuclear weapons.) A senior administration official, speaking on condition of anonymity, said on Wednesday the administration was “closer to the end of that review than we are to the beginning,” but offered no details.

The White House has shared little about the review and whether it will offer concessions to get Pyongyang to return to talks. It has simultaneously signaled a hard line on human rights, denuclearization and sanctions, while making diplomatic overtures that officials say have been rebuffed by Pyongyang, which has long demanded economic sanctions relief.

CUBA, VENEZUELA

Biden promised during the 2020 presidential campaign to reverse parts of Trump’s harsh measures against Cuba, and aides have said they are looking especially at Trump’s last-minute decision to designate Havana as a state sponsor of terrorism.

But the new administration appears to be in no rush. And any significant move of this type would risk a political backlash in the crucial swing state of Florida ahead of the 2022 congressional midterm elections. Trump’s hardline approach was popular among the Miami area’s large Cuban-American population, helping him win the state in November though he lost the presidential election.

Among the other issues still being decided are how to craft a new policy on Venezuela, where Trump’s “maximum pressure” campaign of sanctions failed to dislodge socialist President Nicolas Maduro, and how to close the internationally condemned U.S. military prison for foreign suspects at the Guantanamo Bay naval base in Cuba.

(Reporting by Michael Martina, Matt Spetalnick, David Brunnstrom, Andrea Shalal, Trevor Hunnicutt and Patricia Zengerle in Washington; Editing by Heather Timmons and Jonathan Oatis)