ANNOUNCEMENT 02 Apr 2020

The administration’s action was limited to a request rather than a legally enforceable order, and the controversy was resolved through an agreement involving both exports and imports.

 

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 1 neutral
  • 0 liberalising
Inception date: No inception date

Export-related non-tariff measure, nes

On April 2, 2020, President Trump signed an “Order Under the Defense Production Act Regarding 3M Company.” Invoking the president’s authority under the Defense Production Act of 1950 (DPA), a law that authorizes certain interventions in the production of goods that are deemed essential for the national defense, the order directs the Secretary of Homeland Security acting “through the Administrator of the Federal Emergency Management Agency” (FEMA) to “use any and all authority available under the Act to acquire, from any appropriate subsidiary or affiliate of 3M Company, the number of N-95 respirators that the Administrator determines to be appropriate.” The order makes no direct mention of any actions relating to imports or exports.

The 3M company responded on April 3 by issuing a press release in which it took issue with one aspect not of the order per se but the administration’s overall policy. More specifically, the company objected to suggestions that the administration reportedly communicated to the company over the March 28-29 weekend with respect to imports and exports of these respirators. While the company indicated its willingness to comply with the administration’s request “that 3M increase the amount of respirators we currently import from our overseas operations into the U.S.,” noting that it had already “secured approval from China to export to the U.S. 10 million N95 respirators manufactured by 3M in China,” it went on to state that —

The Administration also requested that 3M cease exporting respirators that we currently manufacture in the United States to the Canadian and Latin American markets. There are, however, significant humanitarian implications of ceasing respirator supplies to healthcare workers in Canada and Latin America, where we are a critical supplier of respirators. In addition, ceasing all export of respirators produced in the United States would likely cause other countries to retaliate and do the same, as some have already done. 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.

Insofar as this action appears to have taken the form of a request rather than an order, and the presidential order under the DPA does not explicitly deal with trade, the GTA characterizes the administration’s suggestion to 3M as an amber rather than a red (restrictive) measure. 

The controversy appeared to be resolved when on April 6, 2020 3M announced an agreement it reached with the Trump Administration "to import 166.5 million respirators over the next three months to support healthcare workers in the United States." The company's announcement observed that it and the administration had "worked together to ensure that this plan does not create further humanitarian implications for countries currently fighting the COVID-19 outbreak, and committed to further collaborate to fight price gouging and counterfeiting." In addition to 3M's pledge to import 166.5 million respirators over the next three months primarily from its manufacturing facility in China, the administration committed "to working to address and remove export and regulatory restrictions to enable this plan," which will "enable 3M to continue sending U.S. produced respirators to Canada and Latin America, where 3M is the primary source of supply."

AFFECTED SECTORS

 

AFFECTED PRODUCTS