Background

The Biden administration recently announced concrete actions it plans to take this year to “build long-term resilience across critical supply chains and formally institutionalize supply chain resilience throughout the federal government.” The White House said these efforts will build on reports released by a number of federal agencies the same day that identify key weaknesses in “some of the nation’s most crucial supply chains” and outline multi-year strategies to address them. The administration also urged congressional passage of legislation (such as the COMPETES Act in the House and the USICA bill in the Senate) that includes “historic investments” that would further strengthen supply chains, increase domestic manufacturing, and “help us outcompete China and the rest of the world.”

Highlights of the administration’s planned actions include the following.

- The Department of Transportation has opened a $450 million grant program to support projects that will improve the movement of goods to, through, and around ports, such as constructing new vessel berths, restoring docks, and extending rail lines.

- The DOT will develop and issue revised state freight plan guidance that requires consideration of cargo flows, the impacts of e-commerce, and supply chain resilience in directing funding under the recently-enacted infrastructure law.

- The administration has announced plans to invest in sustainable domestic production and processing of critical minerals (click here for more information).

- The Office of Management and Budget will soon issue a new Buy American rule allowing the federal government to pay an additional premium for critical U.S.-made products and components essential to the administration’s supply chain resiliency strategy.

- To reduce dependence on imports for a range of key pharmaceutical products and active pharmaceutical ingredients, the Department of Health and Human Services will fully establish a Defense Production Act Title III program to provide loans, grants, and other financing to build and expand the health resources industrial base.

- The administration will host a ministerial-level summit on global supply chain resilience to address near-term bottlenecks and tackle long-term challenges, establish with Mexico a joint list of critical sectors involved in cross-border supply chains and create procedures to maintain continuity of supply chains in times of crisis, work within the U.S.-Mexico-Canada Agreement to define essential industries and effective approaches for supply chains, and hold a supply chain coordination meeting with Canada and Mexico by this summer.

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