How Joe Biden wants to address mask or microchip shortages
Audio 03:48
US President Joe Biden.
REUTERS - KEVIN LAMARQUE
By: Dominique Baillard Follow
8 min
Joe Biden tackles shortages plaguing US industry.
The President of the United States signed a decree yesterday to assess the remedies to be put in place.
Publicity
The pandemic served as revealer: the lack of masks or gloves at the time of the onset of Covid-19 horrified Americans.
Today, the semiconductor defect paralyzes several large automobile factories, which will generate a considerable shortfall for this industry.
Suddenly, the cost-crushing global value chain organization becomes a trap.
Both the United States and Europe are reliving the trauma of the 1973 oil shock when they realize their dependence on the Gulf countries.
Not a lack of oil, but of raw materials
Rare earths, for example: these small metals such as neodymium have become essential for high technology.
Both Americans and Europeans have been sweating a cold for years realizing their growing dependence on China;
80% of these minerals are mined in this country.
The US administration has 100 days to identify weak points in the supply chain and how to address them.
By targeting four areas that have become critical: pharmaceuticals, semiconductors, rare earths and electric batteries intended for the automobile, again a market largely dominated by China.
An anti-shortage decree in the form of an anti-Chinese crusade?
Donald Trump launched the trade war, he took sanctions with the increase in customs duties, but without obtaining many concrete results, the US trade deficit with China has on the contrary worsened.
Joe Biden wants to change the game from the inside.
It is an attempt to win back against China and all the other Asian tigers who have become more successful in the vast process of globalization of the economy.
China knows how to manufacture at low cost and it also knows how to grab a market if it deems it strategic.
That's what she did with the rare earths.
Metals which are not that rare on the surface of the globe, but the Chinese have gradually taken control of this polluting industry which is often frowned upon in the West.
For semiconductors, China is still far from being autonomous, but it is working hard to become so and in the process take the advantage: 40% of new production capacities planned for the next ten years are located in China , Only 10% in the United States.
How to break with thirty years of addiction?
Easier said than done.
There is no magic bullet.
The massive relocation of production is not on the agenda, it is very costly, and therefore ultimately penalizing for the economy which chooses this path.
The US administration instead imagines a cocktail of measures to secure supplies.
By building up strategic stocks, as there are for oil.
By building up backup capacities, to be called upon in the event of a sharp increase in needs.
By diversifying supplies when possible, there are, for example, deposits of rare earths in South America and of course by encouraging national production.
A revision of the tax code could bring the big laboratories back to American soil.
IN SHORT
Self-sufficiency in vaccine for Latin America, this is the goal of Mexican and Argentinian leaders
Currently Argentina produces the active substance of Astra Zeneca and Mexico is packaging it.
Their leaders who met yesterday in Mexico wish to eventually serve all of Latin America;
Argentina's Fernandez and Mexican Lopez Obrador deplore the de facto monopoly of rich countries and want vaccines to be seen as global commons.
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