US moves to reduce dependence on China in key sectors of the economy

President Joe Biden, this Monday in Washington.ALEX WONG / AFP

The US is flying the flag of strategic autonomy to reduce dependence on China and other competitors by strengthening supply chains for essential or critical goods, from sanitary equipment to microchips or minerals.

The pandemic revealed how dependent the West is on Chinese production and President Joe Biden, in his eagerness to encourage local industry, plans to sign an executive order on Wednesday to guarantee that, in the event of new crises, the country will be able to to respond to needs.

The interruption of production at several automotive plants due to lack of components demonstrates the urgency of the measure.

The old protectionism, clothed in Donald Trump's case with an inflamed economic national populism, led Biden to use the slogan

Made in America

as a mantra during the election campaign

, in support of local industry.

It also promotes its latest decree, which provides for the immediate 100-day evaluation of the supply chains of semiconductors, active principles of drugs, batteries for electric vehicles -another bet of the Democratic Administration, which will renew part of the official fleet with them- and minerals extracted from rare earths that are used in the manufacture of cars or weapons, and in which the dependence of China is enormous.

These are the four urgent objectives.

But the assertion of Biden's US against China goes beyond the merely economic.

William Burns, the veteran diplomat nominated as the new director of the CIA, argued this Wednesday during the confirmation hearing in the Senate that success in stopping the Asian giant will be key to the strategic security of the United States. fought by Trump against Beijing, and vice versa, is far from over, only swords have been sheathed, and the Chinese regime has proposed a new type of bilateral relationship only if Washington lifts trade sanctions and stops meddling in internal affairs, such as the repression of the Uighur minority or the anti-government protests in Hong Kong.

The executive order also contemplates the annual review of the production and supply chain in six sectors: defense, public health and biotechnology, telecommunication technologies, energy, transportation and food production, and provision of agricultural raw materials.

Six areas that represent the core of strategic security that Burns alluded to before the Senate;

to avoid not only an "unacceptable" fact - the term used by the White House - such as the lack of personal protective equipment and masks for health personnel at the beginning of the pandemic, but also "the recent shortage of semiconductor chips [for the automotive industry], which has slowed down the rate of production of the plants, a decline that could end up affecting workers, ”according to the White House.

Several plants, including those operated by Ford and General Motors, have recently been forced to halt production due to lack of components, with a 20% reduction in workload this quarter at the former and the temporary suspension at factories in the US. USA, Canada and Mexico the second.

A group of semiconductor manufacturers earlier this month asked Biden for incentives to boost production, in the context of its economic recovery plans.

The US firms in the industry sell 47% of the chips in the world, but they only represent 12% of global production, as a result of the relocation in force since the 1990s.

The intention of the decree law is ambitious: the reactive response is over, it is the message;

the bet, at a thousand percent, is to anticipate crises and remedy the vulnerability revealed by the coronavirus gale.

But it also means a retreat in relocations, such as those that have taken 70% of the production of active medicinal ingredients out of the country in recent decades, the calculation on which the White House is based to consider that market a priority.

There is no magic formula that solves shortcomings in the short term, but, according to a senior White House official quoted by Reuters, "it is not just a matter of requesting reports, but of closing the holes as we identify them."

• Biden gives priority to the national industry in the contracts of the Federal Administration

To cut ties with China and other economic competitors, the US will seek to develop some of that now-deficit production locally, and partner with other Asian and Latin American countries when it cannot do so at home, the source added.

The review of the strategic sectors also aims to reduce the number of imports to those strictly necessary.

Biden's executive order joins the one signed in January to take advantage of the purchasing power of the US Government, the largest buyer of goods and services in the country, to incentivize local production and create markets for new technologies by requiring recourse to national companies for contracts.