At the G-20 summit on Sunday, U.S. President Joe Biden will come together with world leaders to talk about possible solutions to recent supply chain bottlenecks impeding the global economy as it picks up the pieces from the COVID-19 pandemic.
Despite devoting a combined $15 trillion to combat the fallout from COVID-19, many of the world's largest economies are slogging through mass shortages as ships are waiting to dock, the prices of shipping containers climb, not enough trucks exist to haul goods from ports and virus outbreaks halt factory production.
Supply chain issues have emerged as a point of economic and political stress for Biden, as the delays have contributed to inflation and potentially put a damper on holiday shopping. Republican lawmakers have cited the threat of inflation and supply chain challenges in critiquing Biden's economic leadership.
In Sunday's meeting, the president plans to discuss at the G-20 how each country can identify and resolve bottlenecks, said a senior administration official who requested anonymity while discussing the plans. The goal is to help relieve pressure and boost growth.
There is also the broader goal of greater coordination among countries so that supply chains are more resilient. This means increased transparency on shipping issues so that possible problems can be identified and addressed. After the pandemic shut down factories, Biden plans to discuss how countries can identify strategies to ensure the production of essential goods, such as computer chips, is not taken offline for an extended period of time.
The president is expected to make announcements on U.S. plans to stockpile critical minerals and metals, as well as provide details regarding which U.S. resources will be available to end blockages at key ports around the world, the senior administration official said.
Biden also met with President Recep Tayyip Erdoğan Sunday morning.
Biden winds down his time in Rome on Sunday and heads to Glasgow, Scotland, on Monday for a U.N. climate conference.
The president will end the day by holding a news conference, where his domestic agenda might generate as much attention as his foreign policy efforts. House Democrats are hoping to vote Tuesday on his $1.75 trillion spending plan for families, health care and the environment as well as on his $1 trillion infrastructure plan that has already cleared the Senate.
Back in June, the Biden administration had announced that it was forming a task force to address the bottlenecks in the semiconductor, construction, transportation and agriculture sectors.
The largest economy in Europe was also not spared from the disruptions as German consumers faced higher prices for goods across the board as more and more companies decide to pass on increased production costs, driven by widespread supply shortages and a spike in energy prices.
Eurozone and British manufacturing activity also suffered from logistical issues, product shortages and a labor crunch that are likely to persist and keep inflationary pressures high.
Growth in French manufacturing weakened a tad more than initially forecast, as problems over supplies of goods weighed on the industry. The supply bottlenecks kept the pressure on the costs of the raw materials factories need and manufacturers passed some of those increases to customers and the eurozone output prices index approached the record high seen in the summer.
Manufacturers in Japan, the world's third-largest economy, faced pressure from pandemic restrictions and heightened disruptions as well as shortages of raw materials and delivery delays and its PMI marked its slowest pace of expansion since February.
"Though some of the bottlenecks should soon start to ease, many sectors – most notably those requiring semiconductors – are likely to face disruption for much of 2022," said Martin Beck, senior economic advisor to the EY ITEM Club.
"This signals activity is likely to remain constrained for some time to come."