3M Co. pushed back against a request from the Trump administration to halt exports of protective face masks, saying the move would cut off critical supplies for neighboring countries and raise “significant” humanitarian concerns.
The manufacturer said Friday that it was asked by the White House to stop sending U.S.-made respirators elsewhere in North America in favor of boosting domestic supplies. 3M currently produces 35 million masks a month from a pair of U.S. factories, which serve customers across the region.
There would be “significant humanitarian implications of ceasing respirator supplies to health-care workers in Canada and Latin America,” the company said in a statement. Halting exports could also generate retaliations from other countries, potentially reducing the overall number of masks available in the U.S.
The comments come a day after President Donald Trump attacked 3M over face mask supplies and issued an order under the Defense Production Act to speed output of ventilators and respirators for coronavirus patients. Trump tweeted Thursday evening that the company would “have a big price to pay” for its handling of the masks, without specifying the problem.
Though Trump didn’t detail his concerns with 3M, White House trade adviser Peter Navarro said at a Thursday news conference that the administration has had concerns about whether the company’s production around the world is being delivered to the U.S. The White House didn’t immediately respond to a request for comment on 3M’s assertion that it was asked to halt exports.
The issue drew the attention of Canadian Prime Minister Justin Trudeau, who emphasized the importance of keeping supply lines open. At a press conference Friday, he said 3M has said it’s committed to delivering masks to the country, and that Canada is in discussions with the U.S. about continuing trade in medical supplies without restrictions.
”We continue to be confident that we’re going to receive the necessary equipment,” Trudeau said. “We will do everything we can that no part of Canada goes without.”
3M Chief Executive Officer Mike Roman said it’s “absurd” to suggest that the company isn’t doing all it can to increase availability of masks in the U.S. and stop middlemen from jacking up prices.
“The narrative overnight that we’re not doing everything to maximize the delivery of respirators in our home country is false,” Roman said in an interview on Bloomberg TV. “Nothing could be further from the truth.”
The St. Paul, Minnesota-based company has ramped up production to 100 million masks a month globally. 3M highlighted efforts to increase the number of masks imported from its overseas factories, including approval to ship 10 million respirators from China.
The company said it was already working with the Trump administration to prioritize orders from the Federal Emergency Management Agency before the Defense Production Act was invoked. The latest actions offer a framework to “expand even further the work we are doing in response to the global pandemic crisis,” 3M said.
3M fell 2.6% to $134.35 at 1:07 p.m. in New York amid a broader market downturn.
Dallas Mavericks owner Mark Cuban has said he’s been in touch with the White House about supposed price gouging by resellers of 3M masks and accused the company of not doing enough to ensure they end up in the hands of medical professionals.
3M has previously said it hasn’t changed its prices and can’t control what dealers and retailers charge.
The implications of the Defense Production Act aren’t entirely clear, but the president is unlikely to ask Congress to impose wage or price controls on the company, Credit Suisse analyst John Walsh said in a note. Still, he said, “the negative headlines could impact 3M’s consumer business.”
The president is facing mounting pressure from governors and congressional Democrats to use the Korean War-era defense law that gives him sweeping powers to force companies to produce personal protective equipment and ventilators that are in short supply. More than 245,000 people in the U.S. have contracted the virus and more than 6,000 have died, according to Johns Hopkins University.
Trump has expressed reluctance to use the defense law, comparing it to nationalizing industries. He has said he prefers to use threats to invoke the act as leverage to force companies to comply with demands to manufacture equipment.
The president, however, ordered General Motors Co. last Friday to make ventilators by directing the U.S. health secretary, under the defense law, to require the automaker to do so.
— With assistance by Ellen Proper, and Kait Bolongaro
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