Stephen Olson

Opinion | In making US supply chains stronger, Joe Biden’s policies may end up looking more like Donald Trump’s than Barack Obama’s

Expect more reshoring to protect American worker interests, and greater regionalisation with partners such as Colombia or Mexico preferred over those in Asia

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Stephen Olson

Published: 1:30am, 5 Mar 2021Updated: 3:43am, 5 Mar 2021

US President Joe Biden recently signed an executive order for a 100-day review of potential weaknesses in the US supply chain for semiconductors, pharmaceuticals, batteries for electric vehicles, and critical minerals used in various hi-tech products.

The move had been anticipated, as Biden had pledged during the presidential campaign to address vulnerabilities in the US supply chain that had become glaringly evident during the pandemic.

Recent developments have only highlighted the urgency of the task, as a surge in demand for home electronics during the lockdown created a chip shortage for the carmaking industry that forced several production facilities to halt work.

The review will not be based purely on economics, however. As China has risen as a geostrategic competitor, concerns about the crucial role it plays in many critical supply chains have also risen, and one unstated but understood objective of the exercise will be to reduce dependence on China.

Broadly speaking, the review is certain to conclude what has become apparent: that the United States is too reliant on foreign countries in at least some areas, and that many supply chains lack sufficient resiliency to cope with environmental or public health disruptions.

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These conclusions will only reinforce Biden’s core belief that the US needs to pursue a US worker-centric approach to trade. The net result will be trade policies and domestic initiatives (such as financial incentives and procurement regulations) designed to encourage production in the US and discourage reliance on extended supply chains.