Via Teleconference
2:03 P.M. EST
MODERATOR: Good afternoon, everyone, and thank you for joining our call.
A few minutes ago, I sent around a factsheet that this –that lays out the announcements that the President will be announcing tomorrow. If you have not received them, I will be resending that in — in a second to everyone who has registered for this call.
The first portion of our call is on the record and will include remarks from National Economic Adviser Lael Brainard. The second portion of our call will have questions and answers from Joelle Gamble and Monica Gorman from our National Economic Council.
This call and the factsheet are embargoed until 5:00 a.m. tomorrow, November 27th.
With that, I’ll turn it over to Lael for on-the-record opening remarks.
DIRECTOR BRAINARD: Well, thank you to everyone for joining us today. I hope you all had a wonderful Thanksgiving.
The pandemic brought tremendous hardship to so many.
In addition to the human hardship, the pandemic led to unprecedented stress in our supply chains, creating shortages in everything from semiconductors to cars, to washing machines, to everyday household goods.
In his first month in office, the President signed an executive order on America’s supply chains and established a Supply Chain Disruptions Taskforce.
He secured important actions on shipping and trucking through the Ocean Shipping Reform Act and the Trucking Action Plan.
And to enable investments in America’s transportation systems and key inputs, the President secured the Bipartisan Infrastructure Law in his first year and the CHIPS and Science and Inflation Reduction Acts in his second year.
When supply chain stress intensified, input prices rose and some corporations increased consumer-goods prices by even more, contributing to a surge in inflation.
Today, as a result of the actions taken by President Biden, supply chain stress has been reduced from record highs to record lows and inflation has declined by 65 percent from its peak.
You can see this visually by looking at the relationship between the Global Supply Chain Pressure Index and CPI inflation.
But this work is not done. President Biden will continue working to ensure American supply chains are resilient and corporations are bringing prices down for American consumers.
Tomorrow, President Biden will launch a White House Council on Supplier Resilience and announce 30 new actions to strengthen American supply chains and bring down costs for American families.
He’ll announce a presidential determination to broaden the Department of Health and Human Services’ authorities under the Defense Production Act to mitigate drug shortages and invest in essential medicines in America. HHS has identified $35 million for investments in domestic production of key starting materials for sterile injectable medicines and will designate a new supply chain resilience and shortage coordinator.
The Department of Defense will also soon release a new report on pharmaceutical supply chain resilience.
The Department of Homeland Security will launch a new Supply Chain Resilience Center and new tabletop exercises designed to test the resilience of critical cross-border supply chains.
Near-term priorities will include addressing supply chain risks resulting from threats and vulnerabilities inside U.S. ports.
The Department of Commerce will launch a new, first-of-its-kind supply chain center to integrate industry expertise and data analytics to develop innovative supply chain risk-assessment tools.
And DHS and the Department of Commerce will collaborate to strengthen the sem- — semiconductor supply chain and further the implementation of the CHIPS and Science Act.
So, we’re pleased with the progress on supply chains that was showing up in lower prices — in everything from turkeys to gas prices this Thanksgiving — but we’re determined to keep working to bring down prices for American consumers and ensure the resilience of our supply chains for the future.
And with that, let me turn it back to [Moderator]. Thank you.
MODERATOR: Thanks so much, Lael.
We’ll now turn it over to questions and answers. If you have a question, please use the “raise hand” function. We’ll take a second and then we’ll take some questions on background as “White House officials.”
All right, our first question goes to Paris Huang with VOA.
Q Hi. Thank you, Michael. Thank you for doing this. So, I — I have two questions. One is on the pharmaceutical. In — in the factsheet, you talk about the DOD is going to find a more reliable source of the — the pharmaceutical supply chain. Is that talking about those precursors or the drugs that importing from China? Is that part of the — are we switching from China to India to look for those sources? So, that’s my first question.
And second is on the semiconductor. Of course, we talked about the CHIPS Act. There was a concern over Taiwan’s semiconductor abilities and the Chinese threats to Taiwan. Is that factoring into these new actions you want to pursue? Thank you.
SENIOR ADMINISTRATION OFFICIAL: All right, this is [senior administration official]. Happy to start.
So — so, first off, thank you all for being on the call today. As Lael mentioned, this is a part of the President’s long-term strategy to support resilience of critical supply chains following on, you know, work that has been done over the last two years, including a day-one executive order on America’s supply chains.
To your — to your questions (inaudible) there’s actually a fairly similar answer. The goal of these actions, including the Department of Defense’s report on pharmaceutical supply chains and the collaboration between Commerce and DHS on semiconductor supply chains, is to make sure that we are both — using both domestic tools and international partnerships to diversify supply chains for critical goods.
We know that hyperconcentration in just one region can bec- — can become a problem because of the heightened risk of — of geopolitical, economic and climate shock, as we experienced during the pandemic. So, the goal here is to work strategically across domestic partners and international partners and allies to make sure that we’re securing the supply chain for these goods.
The different agencies mentioned have specific expertise in these areas that they’re leveraging through the work of the council and the works mentioned in the factsheet.
MODERATOR: Thanks — thanks, [senior administration official].
I’ll turn it over now to Jeff Mason from Reuters.
Q Hi. Thanks very much. Can you give any more details about the two centers that Lael mentioned at the two agencies? What will they do with regard to supply chains and semiconductors that hasn’t already — that isn’t already being done by those two agencies?
SENIOR ADMINISTRATION OFFICIAL: Sorry for the — the delay; I was trying to unmute.
So, the partnership between these two agencies, I think, is important because, you know, they have complementary authorities.
DHS has unprecedented access to cross-border information, data flows, et cetera. CBP, for instance, is one source of data and unique partnerships with industry from the security standpoint.
Commerce as an agency that is very, very focused on trade in an economic sense has a different set of authorities. And so, what the Secretaries announcing is a partnership to continue to work as they announce (inaudible) funding — you know, as we get a better sense of who the major players will be in the United States, to make sure that we are doing all that we can to sumor — support, you know, this kind of resurgence of chips production in the United States.
MODERATOR: Thanks. I’ll now turn it over to Lori Anne [ph].
Q Good afternoon and thank you for, you know, putting this on. I’ve got a couple of questions.
As regards to flow, in terms of the interoperability and the sharing of data — as we all know, you’re one firewall away from a potential, you know, hacking incident. What we’ve seen in Australia and the impact that it has had, if you will, on the flow of trade for their ports — what kind of systems do you have in place in terms of the sharing of data and to ensure that — that all the links that are together are indeed strengthened and not weakened? Because as you all know, it could just take one link for somebody to get into a system. Thank you.
SENIOR ADMINISTRATION OFFICIAL: Thanks for your question.
That — that is, in fact, the beauty of flow is that there are a number of different players along the supply chain who are collaborating across — across industry and with the federal government to be able to create a kind of interoperable data set.
Basically, you pay to play, right? So, a lot of the industry players benefit from flow because they get (inaudible) from their competitors, and that incentivizes them to participate as well. And so, you get a fuller picture of what’s happening in the ports system.
So, that is — that is the goal of it in t- — the goal is to strengthen it. And (inaudible) will be announcing a few new partnerships along those lines.
I don’t know if, [senior administration official], there’s anything you wanted to add to that, since you’ve been working closely with them.
SENIOR ADMINISTRATION OFFICIAL: Sure. I did just want to note — I mean, again, you — you stressed it, [senior administration official]: the beauty of the cross-collaboration here.
But this will also be a focus for the new Supply Chain Resilience Center at the Department of Homeland Security, which is particularly looking at risks from critical infrastructure as it relates to the flow of goods. So, just noting that that point will be crucial as they work together with (inaudible).
MODERATOR: Thanks. Our next question will go to Courtney Brown, who’s on the phone.
And if we can’t get Courtney — I know that the phone is difficult — we’ll turn it over to Morgan.
Q Hey, thanks so much for doing this. I just had two questions.
First, on the coordinator at HHS, is this going to be a new — new person from outside government? Do you have someone within the agency that’s going to be tapped for that? Can you say who it’s going to be? Is that, like, an announcement that will come later on?
And then on the DPA. Can you just kind of give us a sense of how quickly we’ll start to see some results from the President using that? And is that going to actually happen tomorrow, that he invokes the DPA?
SENIOR ADMINISTRATION OFFICIAL: Sure. So, HHS is announcing the creation of this coordinator tomorrow. They’ve managed — despite congressional, you know, rescission of a lot of their funds from the pandemic, they managed to secure multiyear funding to do so.
They’ll announce the actual coordinator at a later date but have been working really hard to secure the financing to make this a durable position, which was important to the overall effort.
On the DPA, the presidential determination will be released this week. And we will, you know, of course, hope to see results as soon as we can. But as you can imagine, this is a very, very hard problem.
And so, this is one of many steps the administration will be taking to help invest in both our domestic manufacturing capabilities and to address overall issues with drug shortages.
SENIOR ADMINISTRATION OFFICIAL: Just to add to what [senior administration official] said, HHS has identified $35 million for investments in domestic production of (inaudible) materials for (inaudible) as well.
MODERATOR: Thanks. And we’ll now turn it over to Courtney again, who I know was trying to unmute. And we’ll take that as the last question.
And if not, we can always take questions by email.
So, thanks, everyone, for joining us today. If you have any questions or didn’t get the factsheet, please feel free to follow up over email.
The remarks by National Economic Adviser Lael Brainard were on the record. The Q&A was on background as “White House officials.” And this call and the factsheet are embargoed until 5:00 a.m. tomorrow.
I hope everyone enjoyed Thanksgiving.
Thank you.
2:17 P.M. EST
