Kristi Zentner and Heather Marx, attorneys in the Customs, Imports & Trade Remedies Practice Group of Cozen O’Connor, discuss how the recommendations of Biden’s supply chain task force might lead to real progress toward the return of domestic manufacturing of critical supplies.
At the outset, the task force’s recommendations appear to be a matter of “triage,” says Marx. “They’re trying to take a gigantic problem and distill it down to bite-sized, achievable moments.” The underlying goal is to “shift the optics” in order to position U.S. supply chains to take a proactive approach to potential disruptions.
The immediate need is to establish a reliable domestic supply of vaccinations, related supplies, and semiconductors. The COVID-19 pandemic, along with the sudden shortage of semiconductors for a range of high-tech products, has awakened Americans to the need for a major shift in sourcing strategies and supply-chain risk management.
Zentner believes that the Administration’s efforts could form the basis of an agreement between the two major political parties that a strong domestic manufacturing base is essential to the nation’s future. But the effort won’t happen overnight, says Marx. Government will have to convince the business sector to make substantial investments in reshoring — “to realize the many benefits to playing the long game, and shifting back to U.S. manufacturing. They’re going to have to buy into that.”
The initiative will also require a concerted effort by business and government to attract and train American workers. To make that happen, says Zentner, companies will have to substantially raise wages and other incentives for prospective employees. “The question is,” Marx says, “can you make these positions attractive enough to make sure the human capital we have stays here? This is a minimum-wage question to the tenth degree.”