The White House issued what it describes as the inaugural Quadrennial Supply Chain Review on December 19, 2024, which the incumbent Biden-Harris Administration says represents its efforts to strengthen economic security and build resilient supply chains.
According to the administration, the review outlines government initiatives aimed at addressing supply chain risks, bottlenecks, and efficiency. The White House suggests these efforts are contributing to job protection and community development across the country.
Manufacturing initiatives and supply chain perspectives
US Secretary of Commerce Gina Raimondo stated, "Strengthening supply chains and revitalizing America's position in semiconductor manufacturing has been a cornerstone of the Biden-Harris Administration's agenda from the very beginning."
She added, "This review underscores our commitment to partnering with industry to proactively address supply chain challenges, develop innovative solutions, mitigate future disruptions, and bring back American manufacturing. By working together, we are bolstering economic and national security and building supply chains that can meet the demands of tomorrow—particularly in critical sectors like information and communications technology and semiconductors."
SCALE tool introduction
The Department of Commerce's (DOC) Supply Chain Center has introduced its SCALE supply chain risk assessment tool, presenting initial findings in the Review.
According to the DOC, SCALE aims to enhance the government's capability to assess resilience and vulnerability, using more than forty indicators to evaluate current or prospective risk across the US goods economy.
The department suggests this tool will strengthen its industry collaboration efforts around supply chain risk, noting that building resilience requires coordination between public and private sectors.
Assessment findings and implications
The Review's assessment indicates most US goods industries show exposure to structural supply chain risks, with nearly every industry reportedly scoring high in at least one risk indicator. According to the analysis, the US goods economy shows significant interdependence, with more than 86% of industries reportedly depending on inputs from other industries classified as medium-high or high-risk.
The review suggests US goods industries demonstrate limited import diversification, reporting that nearly 38% of industries rely heavily on single-country-sourced products, with over half showing minimal source-country diversification for critical inputs. The assessment identifies electronics, chemicals, and transportation among the highest-risk industries, citing high import levels from certain countries, including China, as potential risk factors.
Strategic initiatives and industry developments
The Review highlights several DOC programs reportedly aimed at strengthening supply chains, particularly in ICT and semiconductor sectors, including the CHIPS and Science Act, BEAD Program, Tech Hubs program, and Public Wireless Supply Chain Innovation Fund.
The administration reports that private investment announcements in semiconductor and electronics sectors have reached over US$450 billion since its term began, which it attributes largely to public investment initiatives.
Current challenges and industry perspectives
According to the Congressional Research Service, over 90% of advanced semiconductor production is concentrated in East Asia, with TSMC reportedly accounting for more than half of this production.
The Semiconductor Industry Association (SIA) reports that US semiconductor manufacturing market share declined from 37% in 1990 to 12% in 2020. The CHIPS Act, allocating US$52 billion, aims to address this trend, according to administration officials.
McKinsey & Company analysis suggests supply chain diversification could potentially reduce reliance on high-risk regions by 25%, though the firm notes this would require significant coordination and investment. Experts from the Peterson Institute for International Economics (PIIE) emphasize that successful reshoring efforts would likely require coordinated policies, infrastructure development, and workforce training programs.
The DOC indicates it will continue to develop policies aimed at supply chain resilience, though the long-term impact of these initiatives remains to be seen.
