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Feb. 24, 2021, 6:36 a.m. EST

Biden to sign an executive order to review U.S. supply chains for large-capacity batteries, microchips

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By Associated Press

WASHINGTON (AP) — President Joe Biden is preparing to sign an executive order to review U.S. supply chains for large-capacity batteries, pharmaceuticals, critical minerals and semiconductors that power cars, phones, military equipment and other goods.

The United States has become increasingly reliant on imports of these goods — a potential national security and economic risk that the Biden administration hopes to address with the planned 100-day review and the possibility of increased domestic production, according to administration officials who insisted on anonymity to discuss the order. However, Biden will also look to work with international partners to ensure a stable and reliable supply chain.

The order being signed Wednesday will include sectoral reviews to be completed within one year for defense, public health and biological preparedness, information communications technology, energy, transportation and food production.

Over the past year, the fragility of vital supply chains has been revealed repeatedly. The coronavirus outbreak led to an initial shortage of masks, gloves and other protective medical equipment. Automakers in the United States and Europe are now dealing with a shortage of computer chips.

Administration officials have met with automakers and are talking with foreign counterparts on how to boost supplies in the short term. But there is no magic bullet to immediately fixing the lack of semiconductors /zigman2/quotes/210598361/realtime SOX +0.61% for automakers, an administration official said.

The chip shortage is indicative as to why Biden is trying to be proactive with the reviews, so that they can strengthen the supply chains to prevent additional challenges from emerging. Administration officials say that they plan to partner with industry and members of Congress as part of the effort and that no tool is off the table, including the use of the Defense Production Act.

Nearly every major automaker that produces vehicles in the U.S. has cut production because of the shortage by canceling shifts, slowing assembly line speeds or temporarily closing factories. Most automakers have tried to limit the cuts to slower-selling vehicles.

But the shortage has forced the Ford Motor Co. /zigman2/quotes/208911460/composite F +1.75% to at times cancel shifts at two plants that make the F-Series pickup truck, the top-selling vehicle in the nation. Besides Ford, Stellantis /zigman2/quotes/204248628/composite STLA +7.04% (formerly Fiat Chrysler), General Motors /zigman2/quotes/205226835/composite GM +4.05% , Toyota /zigman2/quotes/200537742/composite TM +0.55% and Honda /zigman2/quotes/207173990/composite HMC +1.30% have had to slow production.

/zigman2/quotes/210598361/realtime
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