The Biden administration’s supply chain “review” is a bigger deal than you might think.
From Fortune CEO Alan Murray’s CEO Daily, mailed to subscribers Friday:
I read the order yesterday—you can find it here—and was surprised by its sweeping scope. A few things to note:
—The order goes far beyond chips and PPE. It calls for a 100-day review of four key product areas: semiconductors, batteries, ‘rare earth’ minerals, and pharmaceutical ingredients. And it also calls for a year-long review of six key sectors: defense industrial base, public health and biological preparedness, information and communications technology, energy, transportation, and agriculture. That’s pretty much the entire economy.
—It involves not one agency, but all of government, including the departments of Defense, Commerce, Agriculture, Transportation, Energy, Health and Human Services, and Homeland Security. It is effectively an order to the entire cabinet.
—The “supply chain” frame masks a broad agenda, looking at any risk related to “defense, intelligence, cyber, homeland security, health, climate, environmental, natural, market, economic, geopolitical, human rights or force labor,” as well as “reliance on digital products that may be vulnerable to failures or exploitation.”
Add it up, and the “supply chain” review looks like the birthing of a national industrial policy—something the U.S. has long shied away from for fear it would lead to excess government meddling in markets. And remarkably, the effort appears to have broad bipartisan support. President Biden met with a group of legislators from both parties before signing the order and afterwards called it “the best meeting we’ve had so far.”
My take: Murray, briefly my boss at Fortune, was previously a deputy managing editor at the Wall Street Journal.