(Bloomberg) — President Donald Trump eased restrictions on exports of masks and other protective equipment needed to fight the Covid-19 pandemic just days after their introduction as he confronted a backlash from allies around the world.Faced with domestic criticism of his administration’s handling of the Covid-19 crisis and cries of shortages from hospitals on the front lines, Trump late Friday had imposed a ban on exports of N95 masks, surgical gloves and other protective equipment.
But late Monday the president reversed course, saying the 3M Co., with which he had a public fight last week, had agreed to produce 55 million masks a month for U.S. health care workers and to import 167 million masks made by its facilities in China.
The company said it will be allowed to continue exporting some masks to Canada and Latin America from the U.S. The fate of exports to other parts of the world remained unclear.
“So the 3M saga ends very happily,” Trump said at a White House news conference.
3M didn’t immediately respond to a voice mail seeking comment.
In an interview with Fox News earlier on Monday, Peter Navarro, the adviser Trump has put in charge of directing the manufacturing and distribution of that equipment, said the administration was using its powers under the Korean War-era Defense Production Act to address the U.S. shortages.
“We are locked and loaded right today at the border with customs and border protection ready to crack down on black market profiteering in this country,” Navarro said.
Trump on Saturday said his administration was working to make sure that products made in the U.S. were used first to address the needs of Americans. He ordered the ban on exports after clashing with 3M over what the administration said was the company’s sending overseas masks needed in the U.S. The company has warned that limits on its exports could lead to retaliation by other countries.
“We need the masks. We don’t want other people getting it, and that’s why we’re — that’s why we’re instituting a lot of Defense Production Act, you could call it, retaliations,” Trump told reporters. “If people don’t give us what we need for our people, we’re going to be very tough, and we’ve been very tough.”
The move to restrict exports came after dozens of other economies including China and the European Union have done the same in recent weeks.
But the U.S.’s standing as the world’s largest economy gave its actions greater weight. Allies also complained that America was simultaneously waging an aggressive campaign to outbid other countries for supplies internationally.
Together, the moves amount to the first skirmishes in an economic war at the very time when international cooperation to combat the virus should be ruling the day.
Canadian officials scrambled over the weekend to try to convince the Trump administration to exempt their nation from any export ban and those talks continued Monday with Secretary of State Mike Pompeo speaking with his counterpart. The move has drawn particular outrage in Canada because the U.S. neighbor provides raw materials for masks made by American producers such as 3M and Honeywell.
“We are interconnected and interlinked in so many ways from primary resources flowing to American companies to make the equipment that is so desperately needed both in North America and around the world, to actual shipments of products that go from Canada to the U.S. and from the U.S. to Canada,” Canadian Prime Minister Justin Trudeau said Monday.
Ontario’s premier, Doug Ford, complained Monday that most of an order of 4 million masks that the Canadian province had placed with 3M was blocked at the border between the two countries after leaving the company’s plant in South Dakota. Only 500,000 masks were allowed in to Ontario, which would cover the province’s needs for another week.
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Ford said he spoke with U.S. Trade Representative Robert Lighthizer about the issue Sunday and was continuing to press U.S. officials. “We’re putting pressure on the U.S. government from all sides. It’s absolutely critical that they exempt Canada from this presidential order,” he said.A spokesman for Lighthizer did not respond to a request for comment.
The European Commission, which imposed its own restrictions on exports March 15, did not address the new U.S. move publicly Monday. Its own limits on exports, which require the granting of special permits for any protective equipment or ventilators leaving the bloc, are due to expire after six weeks.In a phone interview with Bloomberg, the head of the World Trade Organization, Roberto Azevedo, said he was worried that the introduction of restrictions on trade could lead to others. “If one is in place, others copy,” he said.
In an op-ed published Monday, he also warned that such measures can cause “serious problems in the poorer and more vulnerable countries that typically rely heavily on imports for medical equipment.”
WTO rules contain a key exception that permits its members to impose discriminatory trade restrictions as long as they are necessary to protect human health. But Azevedo said G20 nations needed to stick to a commitment made last month to keep any such measures “targeted, proportionate, transparent and temporary.”
Chad Bown, a trade expert at the Peterson Institute for International Economics, said Trump’s move risked backfiring as the U.S. was still dependent on imports of protective equipment, which other countries could decide not to send its way as well.
In 2019, U.S. exports of N95 masks and other products covered by the ban amounted to about $1 billion, Bown said. Imports were worth about $6 billion.”This is just an incredibly short-sighted policy,” he said. “Of course, we need to acknowledge that there are shortages and other problems out there. But this policy is only going to exacerbate the shortages.”While the administration has blamed the shortages on the U.S. dependence on foreign manufacturing supply chains, critics of Trump’s initial slow response to the crisis say it has more to do with lack of planning and poor maintenance of strategic reserves meant to deal with a situation like a pandemic.Democratic Congresswoman Stephanie Murphy on Monday said the Trump administration’s trade wars over the past two years had hurt the U.S.’s ability to access badly needed supplies and that those calling for additional trade measures risked damaging the American economy further. Murphy has called for the administration to lift tariffs on steel and other products, arguing that would help soften the blow of the recession now underway.
“This administration has as much themselves to blame for their inability to access global supplies as they do any other foreign country,” she told a webinar organized by law firm BakerHostetler.
There were also signs the U.S. crackdown on exports had gone beyond N95 masks and other protective equipment announced Friday.In Barbados, Health Minister Jeffrey Bostic said Sunday that an order of 20 ventilators donated to the Caribbean island nation by an unnamed philanthropist had been blocked from leaving the U.S., though five others given by singer Rihanna were due to land next week.In Brazil, Health Minister Luiz Henrique Mandetta last week said that the country’s efforts to source its own medical supplies from China have “fallen through” after the U.S. made large orders for the same supplies.The newspaper Folha de Sao Paulo also reported last week that 600 ventilators ordered from China by the Brazilian state of Bahia ended up being intercepted by the U.S. during a connection at Miami’s airport. The Chinese ventilator supplier had unilaterally canceled its contract with the Bahia state government for what it said were “technical reasons,” the state’s finance minister told the newspaper.
Brazilian social media lit up with concerns about U.S. behavior over the weekend as Brazilians criticized President Jair Bolsonaro’s efforts to curry favor with Trump as having been for naught. One viral tweet in Brazil on Saturday read: “The U.S. saving the world from a lethal virus is just for the movies. In real life they lose control of the virus and steal imported cargoes of PPEs from other countries.”
The U.S. has repeatedly denied hijacking any cargoes destined for other countries.
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