US Orders 100 Day Review of Certain Strategic Resources
Yesterday President Biden issued an Executive Order commencing a 100 day review of the US supply chain by the Commerce Department with regard to risks associated with semiconductor manufacturing and advanced semiconductor packaging. Further, the Department of Energy is to conduct a similar review relating to high-capacity batteries, the Secretary of Defense is to do the same for ‘critical materials’, which in this case means rare earths, and the Secretary of Health & Human Services is to review the supply chain for pharmaceuticals and ingredients. In more typical government style, these agencies have one year to submit full reports on how to strengthen the US manufacturing base to be less dependent on supplies from foreign adversaries (No specific names, but …China) on a broader basis, expanding into a broad swath of technologies ranging from cybersecurity to agricultural commodities.
Its not like dozens of such reports have been written over the last few years (we have read a few) so this is a ‘new administration’ look at the same problem, which is a horrendous waste of time and capital. The objectives are to reduce reliance on China and other adversaries and to generate those resources from US companies or allies. Of course every administration has to have their own take on these issues, but by the time any actual plan is implemented and starts showing results, years will have gone by. Mineral resources tend to be regional and therefore are hard to ‘re-source’ so stockpiling would be the alternative when it comes to rare earths or similar materials that are necessary for national security or advanced semiconductor development, but that is just the tip of the iceberg. While the US has a big stick when it comes to overall trade, the more specific issues relating to using trade to punish supplier countries for what we believe to be nefarious or ethical issues, comes with lots of repercussions. We are not saying using trade to further ethical ideals is a bad thing, just make up your mind as to what is good and what is bad an implement policies against those judgements. Don’t spend years agonizing over the same issues that resurface every few years. As Nike (NKE) used to say, “Just Do It!”
Its not like dozens of such reports have been written over the last few years (we have read a few) so this is a ‘new administration’ look at the same problem, which is a horrendous waste of time and capital. The objectives are to reduce reliance on China and other adversaries and to generate those resources from US companies or allies. Of course every administration has to have their own take on these issues, but by the time any actual plan is implemented and starts showing results, years will have gone by. Mineral resources tend to be regional and therefore are hard to ‘re-source’ so stockpiling would be the alternative when it comes to rare earths or similar materials that are necessary for national security or advanced semiconductor development, but that is just the tip of the iceberg. While the US has a big stick when it comes to overall trade, the more specific issues relating to using trade to punish supplier countries for what we believe to be nefarious or ethical issues, comes with lots of repercussions. We are not saying using trade to further ethical ideals is a bad thing, just make up your mind as to what is good and what is bad an implement policies against those judgements. Don’t spend years agonizing over the same issues that resurface every few years. As Nike (NKE) used to say, “Just Do It!”
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