The Biden administration wants to make supply chains so strong that you don't have to think about them
Kristin Carringer/Maxar
- The Biden administration is taking action to keep supply chains strong after their pandemic woes.
- That includes forming a council on supply chain resilience, and pouring money into domestic drug production.
- The administration's goal is that you won't have to worry about supply chain woes.
During the pandemic, Americans became intimately — and frustratingly — acquainted with supply chains. All of a sudden, shelves were empty, and consumers were acutely feeling an "everything shortage."
And those shortages added to the soaring inflation that has plagued the economy. Now, the Biden administration wants to ensure that all of that won't happen again.
To help keep supply chains strong, the White House is forming a new Council on Supply Chain Resilience and pouring money into alleviating drug shortages. Biden is planning to invoke the Defense Production Act for $35 million in investments towards materials for producing sterile injectable medicines domestically, an action that comes on the heels of widespread drug shortages.
Antibiotics and vaccinations for COVID-19 and other diseases, "are the kinds of things that we need a supply of here in the United States as well as with the partners and allies we trust," Joelle Gamble, the deputy director of the White House National Economic Council, told Business Insider.
"The goal of these changes is to make sure that Americans have a reliable and affordable supply of critical drugs, and what we call countermeasures — so things like respirators and vaccines, because those are so important, as we learned during the pandemic, to have readily accessible," Gamble said.
Other new supply chain actions include creating a new data-driven Supply Chain Center with the Department of Commerce, which will analyze potential supply chain risks, and $275 million from the Department of Energy in grants towards clean energy supply chains.
Supply chain woes have healed and then some since they first took hold of the economy in 2020. The Federal Reserve Bank of New York's global supply chain pressure index, which evaluates how well the global supply chain is doing compared to its average performance across several metrics showing how efficiently worldwide shipping and logistics are operating, tracked a big spike in supply constraints starting in 2020 and peaking in late 2021. Now, though, the supply chain is performing better than pre-pandemic levels.
That's good news for consumers, and for prices. Supply chain woes during the pandemic not only meant that it was frustrating for Americans to get the things they needed, Gamble said, but also contributed to rising prices.
"A significant share of inflation we saw during the pandemic was due to supply chains essentially being messed up," Gamble said. As supply chains have healed, inflation has also tumbled — although costs remain high on many items, especially as some firms realize that consumers will continue to stomach higher prices.
But unsnarling supply chains does help keep prices in check, and it also means that Americans can get the drugs, food, and goods they need or want. While everyone may have become much more familiar with the supply chain during 2020, as they watched their new pandemic sweatpants languish on bottlenecked boats, the hope is that that's a thing of the past.
"Honestly, I think if we're successful, Americans won't have to think about supply chains," Gamble said, "because that means that they're more resilient, they're more stable."
from Business Insider https://ift.tt/UTI9uBs
No comments