President Biden is expected to sign an executive order on Wednesday that will kick off a review of the supply chains that support several crucial American manufacturing industries, including automobiles, pharmaceuticals and clean energy.
The order will not target imports from any specific country, senior Biden administration officials said Tuesday in a conference call previewing the move, but it is widely seen as the next step in an effort to counter the economic rise of China and to promote factory growth in the United States. The officials cast it as a successor to the “Buy American” order that Mr. Biden signed last month.
The president’s move comes as a global shortage in semiconductors — a key component in cars and electronic devices — has forced several major American auto plants to close or scale back production and sent the administration scrambling to appeal to allies like Taiwan for emergency supplies.
The officials said the order would not offer a quick fix for that shortage. Instead, it would start an effort to insulate the American economy from future shortages of critical imported components.
Mr. Biden plans to order yearlong reviews of six sectors and a 100-day review of four classes of products where American manufacturers rely on imports: computer chips, high-capacity batteries, pharmaceuticals and their active ingredients, and critical minerals and strategic materials, like rare earths.
Subsequent actions to strengthen those supply chains will depend on the vulnerabilities that each review finds, the officials said.
The order is an early salvo in the administration’s economic battle with China. China’s dominance of global supply chains for critical products like medical masks and for raw materials has prompted deep concerns that Beijing’s authoritarian government could cut off the United States at a whim.
China has periodically moved to ban the export of rare earth materials that are crucial for manufacturing electronics, fighter jets and weaponry. Early in the coronavirus pandemic, Beijing halted exports of surgical masks and protective gear as it diverted supplies to its own local governments and hospitals.
Beijing has also sought to expand its foothold in certain emerging technologies by investing heavily in research and subsidizing new factories, raising concerns that China could dominate the supply of electric vehicles, advanced telecommunications gear and semiconductors in the same way it has cornered other global markets.
In a news conference on Tuesday, Senator Chuck Schumer, Democrat of New York and the majority leader, announced that he had directed the leaders and members of Senate committees to start drafting a new legislative package “to outcompete China and create new American jobs.” He said he intended to put the bill, which would build on the bipartisan “Endless Frontier Act” that he introduced last year, on the Senate floor for a vote this spring.
The legislation would encourage investments in American semiconductor manufacturing, which he called “a dangerous weak spot in our economy,” as well as 5G, artificial intelligence and biomedical research.
“I want this bill to address America’s short-term and long-term plan to protect the semiconductor supply chain and to keep us No. 1 in things like A.I., 5G, quantum computing, biomedical research, storage — all of these things are part of the bill and the endless frontiers act,” Mr. Schumer said. “We need to get a bill like this to the president’s desk quickly.”