The White House tried to force 3M to export masks to the US from its hub in Singapore as tensions with the Minnesota-based manufacturer spilled into the open in the midst of the coronavirus pandemic. 3M this week resisted demands by White House officials to send about 10m N95 respirator masks being produced in Singapore for markets in Asia to the US, according to a person with direct knowledge of the matter. The company was reluctant to accept the White House request on legal and humanitarian grounds, as medical workers across the region would be deprived of protection, the person said.
3M executives did commit to exporting a similar number of masks to the US from a plant in China but that did not stop the White House from publicly attacking the company. Donald Trump also invoked Korean war-era powers under the Defense Production Act for the second time since the start of the outbreak. The latest effort would compel the company to sell its products to the US government if requested. “We hit 3M hard today after seeing what they were doing with their Masks. “P Act” all the way,” the US president wrote in a tweet on Thursday night. “Big surprise to many in government as to what they were doing — will have a big price to pay!” Earlier in the day, Peter Navarro, the White House adviser on trade and manufacturing, had hinted at the rising tensions with the company. “To be frank, over the last several days we’ve had some issues, making sure that all of the production that 3M does around the world, enough of it is coming back here to the right places,” he said. White House officials have also been attempting to persuade 3M to limit exports from US facilities to nearby countries, including Canada and Mexico, according to the person familiar with the matter. The regional sales account for only one-10th of the masks 3M produces in the US but are in jeopardy because of the White House’s invocation of the DPA. The Federal Emergency Management Agency (Fema) is now allowed to use “any and all authority” to buy “the number of N95 respirators” it “determines to be appropriate” from 3M and its subsidiaries, according to the wording of the act. In a statement on Friday, 3M said the company was going “above and beyond” to boost production of N95 masks for the US market. It confirmed that the Trump administration had “requested that 3M increase the amount of respirators we currently import from our overseas operations into the US”, noting that it had secured the exports from China. 3M also said that the administration had requested that it “cease exporting respirators” from the US to Canadian and Latin American markets, but warned this could trigger a humanitarian crisis in those countries, where 3M is a “critical supplier”. The company also said the move could prompt retaliation against the US. “If that were to occur, the net number of respirators being made available to the United States would actually decrease. That is the opposite of what we and the Administration, on behalf of the American people, both seek,” 3M said. A Trump administration official with knowledge of the discussions declined to comment on specifics. But the person said there was “a tremendous amount of frustration” within the president’s coronavirus task force. “The administration had worked very hard to ease some rules for 3M and other respirator manufacturers because those companies, 3M chief among them, had essentially promised that they would immediately be putting 35m N95s into the US marketplace. It became clear recently that wasn’t happening,” the official said. Recommended AnalysisTechnology The ventilator challenge will test ingenuity to the limit The move against 3M came on the same day Mr Trump invoked the DPA to force other companies to make ventilators for coronavirus patients. The president said it would help companies — including General Electric, Hill-Rom, Medtronic, ResMed, Royal Philips and Vyaire Medical — secure the supplies needed to make the ventilators. “I am grateful to these and other domestic manufacturers for ramping up their production of ventilators during this difficult time,” Mr Trump said, adding that it would “save lives by removing obstacles in the supply chain that threaten the rapid production of ventilators”. The president invoked the DPA late last month to compel General Motors to make ventilators, after criticising the carmaker for not doing enough to produce equipment. Mr Trump had faced intense criticism for not invoking the DPA sooner as state governors had warned that more ventilators were needed to treat the rapid rise in patients. Editor’s note The Financial Times is making key coronavirus coverage free to read to help everyone stay informed. Find the latest here. The Trump administration has not enacted export controls to keep products in the US. In G20 discussions, US officials have supported statements that any trade actions should be “temporary, transparent, and appropriate”. However, Mr Navarro hinted at a forthcoming executive order from the White House that would see the US customs agency block foreign sales of medical supplies with inflated prices. “We are going to crack down unmercifully,” Mr Navarro said.
PULLED FROM financialtimes.com