Biden will review tech supply chains to reduce dependence on China

The US is still heavily dependent on other countries for technology manufacturing (among other products), and President Biden is looking for ways to reduce that dependence. The LA Times has learned that Biden is ordering a review of US supply chains for semiconductors, “large-capacity” batteries and rare earth minerals to ensure reliable access to those elements. While the effort isn’t explicitly focused on China, unnamed officials told the Times the US was “overly dependent” on that country.

This isn’t just a superficial report, according to the officials — the aim is to “close gaps” and create “diverse and resilient” supply chains.

An official executive order is expected later today (February 24th).

If there are any changes, they could go a long way toward addressing issues currently plaguing US industry. Car manufacturers, for example, are grappling with chip shortages as demand bounces back. A more diverse supply chain could reduce those bottlenecks and help American companies (plus those dependent on them) thrive. That may be particularly important as Biden hopes to spur electric car sales and otherwise help the US claim or maintain its technological advantages.

Whether or not the review will help isn’t clear. Although companies like Apple can move production to Vietnam and otherwise limit their dependence on China, it’s not as simple as cutting ties. Manufacturing often takes place in China due to convenience — a company can get rare earths, components and final assembly in one place rather than having to ship them abroad. Biden might succeed in weaning some companies off of Chinese production, but there may be many companies that don’t have much choice.