White House: no magic bullet for supply chain risks

The Biden administration said on Friday (4 July) it has found some concrete solutions in addressing America’s reliance on foreign countries such as China for critical products, but there is not an instant remedy to solve broader supply chain issues.

White House top economic adviser Brian Deese told reporters at a briefing that the administration will discuss supply chain problems more next week when the results of the President’s 100-day review are released.

The findings were due on Friday.

In February Biden ordered federal agencies to look into how much they depend on imports for semiconductors, pharmaceuticals, automobile batteries and rare earth elements that are crucial to tech and defence.

The agencies were also asked to find ways to increase domestic production in these four areas.

US business has been badly affected by supply chain problems in recent months, with a number of corporates openly speaking about their problems.

Tractor maker John Deere said it expected increased supply chain pressures through the balance of this year and is working closely with suppliers to secure parts and components.

Paint maker PPG Industries noted supply chain challenges for some of its products including epoxy coatings and said “we’re operating hand-to-mouth”.

Perhaps most notably, the US automotive industry has reported shortages of everything from plastic to seats and, most notably, semiconductors.

Such bottlenecks have stemmed from issues such as the paucity of raw materials, port congestion and labour shortages that have slowed down the production of goods or their delivery to the market.

A recent survey from the Institute for Supply Management (ISM) showed record-long lead times, wide-scale shortages of critical basic materials, rising commodities prices and difficulties in transporting products across industries.

It said that the pandemic, now in its second year, has severely disrupted supply chains.

The ISM noted that “companies and suppliers continue to struggle to meet increasing rates of demand due to coronavirus impacts limiting availability of parts and materials.”

Indeed, the ISM’s April survey of purchasing managers across the US showed a backlog of orders that was the highest on records that date back to 1993.