Why the Biden Administration Must Prioritize Supply Chain Security

January 14, 2021
Andrea Little Limbago

By Dr. Andrea Little Limbago, Interos VP of Research & Analysis

For decades, global supply chains powered globalization, integrating economies and crafting complex co-dependencies across corporations and governments. While the pace of globalization slowed following the 2008 financial crisis, that shock was insignificant compared to the events of 2020. The ongoing COVID pandemic and tectonic geopolitical shifts continue to upend the world order, transforming globalization and the supply chains undergirding it. While presenting significant challenges, the incoming Biden administration has a rare opportunity to define the terms of the post-pandemic world order and the emerging norms, standards, and policies that will define it. A comprehensive and modernized U.S. supply chain strategy must be foundational to this transformation, as supply chains uniquely cut across an array of challenges, including the pandemic, national security, economic growth, and climate change.

Supply chains moved from a niche topic to headline news following the implementation of global lockdowns last March. However, for the last few years, the Trump administration has issued a series of executive orders and policy responses to address the supply chain risks. These include executive orders addressing the information and communications technology, energy, critical minerals, and medical supply chains, as well as an unprecedented use of prohibitions and restrictions aimed at removing national security threats from U.S. federal and commercial supply chains.

Administration Must Continue to Focus on Supply Chains

The new administration must continue this emphasis on securing supply chains while crafting a modernized and comprehensive supply chain strategy on par with the entirety of current and future challenges. There are some initial positive signs of movement in this direction. For instance, the COVID response is the incoming administration’s top priority, including securing supply chains to expedite vaccine distribution. The Biden administration has named a Supply Coordinator that will “coordinate the federal effort focused on securing, strengthening, and ensuring a sustainable pandemic supply chain.”

But an integrated supply chain strategy is not just essential for pandemic responses. The SolarWinds cyber breach is just the latest reminder of the digital interdependencies across the government and private sector and the fundamental role of supply chain security to U.S. national and economic security. While there has been a significant increase in awareness and activity toward creating more trustworthy supply chains, a coordinated, whole-of-government strategy is necessary.

Risk from China – and Beyond

For instance, in December 2020 alone, over one hundred Chinese companies were added to the Department of Commerce’s Entity List, continuing a two-year trend where Commerce added over 350 Chinese companies due to national security concerns and human rights violations. These additions are an extension of the economic conflict between the U.S. and China and are indicative of the broader geopolitical shifts underway that are introducing a range of risks. These risks aren’t limited to China. In December, 45 Russian companies were also added and with renewed focus on Russia likely under the Biden administration, the need for greater coordination of industrial policy and export controls across the federal government and the private sector is only going to increase. There also has recently been the on again/off again stock market delisting. All of this activity would benefit from a more comprehensive and unified supply chain strategy.

In fact, the prohibitions and restrictions are just one of many tools deployed to secure supply chains. There also is great opportunity for collaboration in the shift to building trustworthy and resilient supply chains. A strong, democratic coalition can engrain transparency, security, and human rights into global supply chain policies, working together to overcome the insecurity and fragility of modern supply chains and create greater agility, resilience, and security. Although the recent EU-China investment agreement may introduce some challenges, secure supply chain collaboration offers the Biden administration a chance to rebuild alliances and craft new partnerships relevant for the digital era.

These new partnerships can also halt the tide of rising protectionism. While self-sufficiency in critical areas, such as personal protective equipment and rare minerals, would be beneficial, economic decoupling is neither practical nor desirable. This again is why a coordinated and comprehensive supply chain strategy is so essential. The push for ‘Made in the USA’ is strong; identifying new ways to manufacture locally and boost economic recovery must be part of this strategy. At the same time, protectionism and economic nationalism must not be the path ahead, and therefore collaboration with allies and like-minded nations must equally guide a transformed approach to supply chains.

Addressing Climate Change

Finally, the incoming administration has been very vocal about implementing new policies to address climate change, with ten climate-related executive actions the administration plans to take immediately. Many of these are directly relevant to supply chains, including a requirement for public companies to disclose the climate risks both within their own operations as well as across their supply chain. Given the necessity for private sector collaboration in addressing climate change, embedding climate change regulations within a comprehensive supply chain strategy can create the necessary transparency and private sector incentives to optimize impact.

This broad range of risks – from climate change to economic recovery to the pandemic to national security – all require greater supply chain visibility and a modernized approach to supply chain resilience. Building greater supply chain resilience can be an essential lever in addressing the most imminent challenges of our time, reinforcing democratic values, fostering greater security, and streamlining coordinated efforts to address the pandemic and climate change.

Many have wondered whether the incoming administration will continue to elevate supply chains as a core priority. Given this range of risks, and the events of the last year, it is clear that supply chain security and resilience is an economic, national security, and societal imperative. The global pace of change and the growing range of risks require significant supply chain coordination and transformation. The U.S. must modernize its approach to supply chains through comprehensive and coordinated policy and technological solutions, or risk being left behind and vulnerable to the imminent future shocks of a post-pandemic world order.

To learn more about how you can better secure you supply chain, click here. 

 Dr. Andrea Little Limbago is a senior executive at Interos, an Arlington-Va based software company that maps and monitors global supply-chain risk for government- and private-sector clients. Dr. Limbago serves as a Senior Fellow and Program Director for the Cyber and Emerging Technologies Law and Policy Program at the National Security Institute at George Mason University, as well as a Fellow at the Atlantic Council’s GeoTech Center.

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