Building Resilient and Secure Supply Chains Through Trade

By Ambassador Sarah Bianchi

The COVID-19 pandemic and Russia’s unjust invasion of Ukraine have created significant disruptions to global supply chains and trade.  These stresses put a spotlight on pre-existing weaknesses in many supply chains, including in the United States, and the disruptions have led to higher costs for manufacturers, farmers, businesses, and families. The Biden-Harris Administration is focused on addressing these bottlenecks, securing our critical supply chains, lowering prices and revitalizing American manufacturing.

In February 2021, President Biden issued Executive Order 14017, “Securing America’s Supply Chains,” which directed a whole-of-government review of key sectors and major industrial bases. The goal of the review was to identify supply chain vulnerabilities and recommend a full range of policies and actions to reduce risks and prepare for future disruptions. The extensive interagency effort under this Executive Order resulted in comprehensive supply chain assessments released last June. It focused on four key sectors: semiconductor manufacturing and advanced packaging; large capacity batteries; critical minerals and materials; and pharmaceuticals and active pharmaceutical ingredients (APIs). 

As part of this initiative, on June 8, 2021, President Biden established a Supply Chain Trade Task Force led by USTR. Through this Task Force, USTR brings together a broad range of U.S. government agencies to consider ways to address unfair trade practices that undermine critical U.S. supply chains, and to look at how we can use our trade agreements with other countries and trade tools to strengthen supply chain resilience. 

At USTR, we are working closely with trading partners and stakeholders through our many bilateral and multilateral venues, including the U.S.-Mexico-Canada Agreement (USMCA), U.S.-European Union Trade and Technology Council, U.S.-Korea Free Trade Agreement (KORUS), Japan Comprehensive Partnership, U.S.-United Kingdom Trade Dialogue, as well as multilateral organizations such as the World Trade Organization (WTO), Asia-Pacific Economic Forum (APEC), and Organization for Economic and Commercial Development (OECD).  Our main focus has been on areas related to pandemic-related supplies, advanced batteries, semiconductors, pharmaceuticals/active pharmaceutical ingredients, and critical materials and permanent magnets. Some examples of our ongoing work include:

  • Working with other WTO members to identify best practices in the implementation of the WTO Trade Facilitation Agreement to expedite the export and import of COVID-19 products and review trade facilitating measures in the context of current and future pandemics.    
  • Looking at how we can use our FTAs, such as USMCA, to strengthen collaboration with partners and allies on supply chain challenges, including making sure that our supply chains embody strong environmental and labor standards and working with key partners and allies.  
  • Working with like-minded producing countries and key industry stakeholders to identify bottlenecks and chokepoints in the semiconductor supply chain.     

The Supply Chain Trade Task Force is also tracking efforts across other U.S. government agencies. Last month, agencies issued detailed reviews covering six industrial base supply chains: defense, transportation, energy, information and communications technology, public health, and agriculture and food production. Agencies are also looking at new policies and investments across a number of sectors to address the supply chain vulnerabilities that come from geographically concentrated sourcing and to spur the transition to a low carbon economy.  And the U.S. government continues to make key strategic investments that increase the resilience of our industrial base and modernize our infrastructure. Some of the recommendations from these detailed reviews included increasing public investments in R&D and commercialization of key products, such as next generation batteries, creating modern standards for the extraction and processing of critical minerals, and leveraging the U.S. Development Finance Corporation (DFC) and other financing tools to support supply chain resilience and expand production capability for critical products. 

The Administration is also working with Congress to quickly pass the Bipartisan Innovation Act, which will help us maintain our global competitiveness and ensure the long-term resilience of our supply chains through investments in domestic manufacturing and R&D. Among other things, the Act seeks to increase programs that help U.S. manufacturers access suppliers in the United States, fund semiconductor production here at home, and strengthen American supply chains. At the same time, we must also continue to enhance our trade and investment partnerships with allies and trusted trading partners as part of our overall strategy for increasing supply chain resilience.  This work is all the more critical in light of non-market practices and economic coercion of some countries that has been highly disruptive to supply chains.