White House again increases use of defense law to address chip shortage: report

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The Biden administration has again suggested invoking the Defense Production Act to address the critical semiconductor shortage, according to a new report.

Bloomberg News reported Thursday that Secretary of Commerce Gina Raimondo said Cold War-era law was under consideration as a way to impose greater transparency on businesses, to alleviate bottlenecks. production throttling and identify potential flea hoarding.

Raimondo held a virtual meeting on Thursday with executives from technology companies and automakers, including Intel INTC,
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Apple AAPL,
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Ford F,
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and GM GM,
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to discuss the current global chip shortage, which is hampering production of everything from electronic gadgets to new cars.

The Department of Commerce is currently seeking supply chain information from a number of companies on a voluntary basis. But companies would have been slow to transmit this data. Invoking defense law could force companies to disclose this information, Bloomberg reported, presumably giving the government a better picture of the situation so that potential solutions can be worked out.

The Defense Production Act grants the president broad power to allocate resources and production, and was used by former President Donald Trump to increase fan production during the early months of the pandemic, and President Joe Biden the used to help boost vaccine production.

The Biden administration has hinted that it could invoke defense law for months, and Biden issued an executive order to examine U.S. supply chains in February.


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